How Rachel Carlson has turned trade education into a tool for employee retention and a $500 million fortune

The 32-year-old founder raised money for her company at a $3.75 billion valuation in June, boosting her net worth and landing her on Forbes’ new list of America’s Most Successful Self-Made Women.

by alejandra wilson


When Rachel Carlson appeared on the cover of Forbes in December 2019, the world looked drastically different. Unemployment was at a low rate of 3.5% and the term “frontline worker” had not yet entered the public lexicon. His company Guild Education, which creates benefits programs that help employees earn free college degrees and helps employers retain workers, recently achieved unicorn status, a rare feat for an idealistic edtech company.

But the biggest question Carlson faced at the time: If the booming economy took a turn for the worse, would employers still be willing to invest in education for hourly workers? Carlson was confident that they would. The struggles of the past year and a half have proven his hunch correct, as clients like Walmart and Chipotle have increased spending on their education benefit programs. Just two days ago, Target joined the growing list of corporations committed to providing their employees with debt-free titles. In June, venture capital firms including Bessemer Venture Partners and Cowboy Ventures invested an additional $150 million in Carlson’s company at a valuation of $3.75 billion. Fundraising also got Carlson (a old student of the 2017 Forbes 30 Under 30 list) one of the richest self-made women in the US, worth an estimated $500 million. She is one of two founders of education featured in Forbes‘ 2021 list of self made womenthe other is Lynda Weinman of Lynda.com.

Carlson has been generous in dividing up ownership of Guild Education. All of its 1,000 employees have a stake in the company, and more than half of them have equity positions worth at least $100,000. His ownership has been reduced from 95% when he founded the company in 2015 to an estimated current 15% after eight rounds of financing and handing out shares to employees.

“I had a less than ideal initial experience as an employee where nobody really explained to me what social capital was or how to exercise it,” explains the 32-year-old Denver native, who worked in the Obama White House before earning an MBA. from Stanford. “I felt like I could do something different at my own company and teach everyone the value of fairness. Now every employee has a position of $15,000 or more.”

A different type of capital is also built into the company’s business model, which does not require workers to pay anything up front. While many employers already offer tuition reimbursement (it’s a tax break of up to $5,250 per employee), these programs often have low participation rates. Applying for and enrolling in courses can be confusing and cumbersome, and in most cases, employees must pay tuition and wait to be reimbursed. Instead, Guild customers like Taco Bell request customized educational programs to offer their employees, and Guild solicits proposals from more than 100 colleges and universities (nearly all online) and develops the programs it deems best. A team of nearly 300 full-time coaches work with students to select and apply to the 2,357 specialized programs the Guild has created to date.

It also negotiates tuition discounts and facilitates direct payments between employers and schools. Most of Guild’s revenue comes from universities that reallocate money normally spent on advertising to access Guild’s pool of qualified applicants, technology, payments and student services. Although the company doesn’t share how much colleges pay, some online programs spend more than $4,000 to attract each new student. Forbes estimates that 2020 revenue reached nearly $100 million.

“Many would have started a nonprofit, but Rachel has been able to reap the kind of benefits and monetize in ways that most people who do this work can’t because they went the more traditional nonprofit route,” Danette says. Howard, policy director. an official at the Lumina educational foundation, adding that her business model was adequate to respond to the stressful factors that Covid-19 imposed on the labor market. “They were created for this moment.”

Despite her fortune, Carlson doesn’t feel comfortable talking about it. She had hoped she wouldn’t have to broach the issue of net worth until the company went public. And she says that she has no intention of keeping it all. She has allocated 1% of the company’s equity capital to the Guild Foundation, which is run by employees and donates predominantly to causes that support low-income people. Carlson is also an active supporter of a host of Democratic initiatives and candidates, which she’s not surprised given that she’s the granddaughter of former Colorado Gov. Roy Romer.

“Rachel was always at the forefront of what I was concerned about,” says Romer, 92, a lifelong education advocate who co-founded the online giant Western Governors University in 1997 with 18 other governors to expand higher education. to a broader spectrum. section of the population. Romer also served from 2000 to 2006 as superintendent of the Los Angeles Unified School District. “She Now she has grabbed hold of one of the biggest ideas I saw on the horizon. And I see her being more effective than I ever was.”

Another idea Carlson supports: tax reform. Uncomfortable with the idea that employees will sometimes pay a higher percentage in tax than she will, she is a vocal advocate of an estate tax.

“I have benefited financially at levels I had never imagined as a result of building and growing the Guild.

I believe that the wealth that I have accumulated should be taxed as income earned by my employees and all American workers,” Carlson explains. “I hope we see policy changes along those dimensions and I hope that’s a conversation that more CEOs are willing to have.”

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