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Education

Guild Education’s twist on college is working for cashiers, sales clerks and others who abandoned the idea of a college degree

Led by co-founder Rachel Carlson, Guild Education's modern approach to educating workers is fueling Denver startup’s success story

Rachel Romer Carlson, CEO and co-founder of Guild Education, enjoys a visit from her six-month-old twin daughters, Magnolia, left, and Lily Grace at her downtown Denver office on November 30, 2018. (Kathryn Scott, Special to The Colorado Sun)
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Scrambling to get term sheets filled out, calculations corrected and contracts signed isn’t always a pleasant experience, especially when you’re nine months pregnant. With twins.

But Rachel Carlson had done this before. Not the twins thing. But convincing investors to plunk down millions of dollars towards her young Denver startup, Guild Education. The company she co-founded in 2015 with her college classmate Brittany Stich, helps adults in service-level jobs attend college at a hugely discounted tuition.

A mere eight months after Guild raised $21 million in a Series B round, Felicis Ventures, which lost out in joining the round, called in April. It still wanted in.

“We weren’t ready to raise. I was about to go out on maternity leave. But Felicis Ventures … rather than being mad that (we) didn’t make space for them, which some (venture capitalists) do, they said, ‘We’re interested in continuing the relationship,’” said Carlson, a Colorado native. “They flew out here a few weeks before I was due and they said, ‘We will preemptively fund your Series C because we believe so much in this mission. You’re the horse to bet on in education employment initiatives.’”

Guild raised another $41 million for a total of $71 million to date. Eight days later, on May 2, Carlson gave birth to two cuties, Lily and Maggie.

Rachel Romer Carlson, CEO and co-founder of Guild Education at the Guild’s downtown Denver offices on November 30, 2018. (Kathryn Scott, Special to The Colorado Sun)

Carlson, 30, is not your typical CEO, or tech entrepreneur, or venture-backed executive. For one, she’s a she. And she’s taking a different approach to encourage more Americans to try college again or for the first time. Guild partners with employers to make this a benefit for low-income workers. In doing so, Guild is also tackling the future of a large chunk of America’s workforce, which already is feeling pressure from barely livable wages and automation.

“It’s one of these once in a lifetime transformational companies that you won’t often find attacking both a large market and doing it in a way that’s never been done before,” said Wesley Chan, a managing director with Felicis Ventures. “We’re starting to see employers adopt this and it’s starting to become as ubiquitous as 401(k)s.”

The fast-growing Guild, which just crossed the 200-employee mark last month, is also making waves as a different sort of fast-growing tech company.

Carlson figured out how to attract female engineers and developers to her team giving the company a nearly unheard of 50/50 male-female ratio of tech employees.

She convinced skeptical Silicon Valley investors, who prefer their investments be located closer to home, that Denver was a better place for the mission-minded company after posting jobs in both areas. “Bar none, we got better quality talent from applicants and they (investors) were impressed by that,” Carlson said, including leading engineering candidate Jess Rusin, from Denver.

Carlson also made a powerful commitment to employees — and their benefits — before heading out on maternity leave. She read a letter to employees out loud, telling them that while she may pop into the office while she’s on leave, don’t take that as a sign that they should limit their own time off.

“If they saw me in the office six weeks later, I didn’t want any woman or man to think we didn’t respect the full leave,” she said. “What I was trying to do was set up a framework for choice, not a playbook. I’ve just seen it go wrong at too many other companies.”

Carlson’s thoughtfulness has permeated the company, which specializes in offering service-job workers a chance to go to college — and be successful at it. She and Stich tapped into a market that resonated with powerful sources that wanted to fund the education of Chipotle cashiers, Walmart stockers and Disney amusement park employees. Those sources are Chipotle, Walmart and Disney, among many, many employers who have joined Guild’s program.

The model attracted growth capital from several Silicon Valley investors, including Bessemer Venture Partners, Redpoint Ventures and Felicis Ventures. And those who get to know Carlson, who comes from a family of educators, say she’s been prepping for this job her whole life.

“The great thing about investing in Guild is that Rachel has been thinking about this her entire life. A lot of founders stumble on an idea and then spend the next five years figuring it out,” said Chan, with Felicis Ventures. “And it’s working. After our investment, Guild added Walmart, Disney and Discover. Tell me about another amazing company that is getting that traction and I’ll write them a term sheet.”

Employees for Guild Education work from open space areas along with designated offices on November 30, 2018 in Denver. (Kathryn Scott, Special to The Colorado Sun)

Growing up as a Romer

Education has always been a strong value in Carlson’s family. Her grandmother Bea was a working mom who ran Montview preschool in Denver in the 1960s.

“She had her sixth kid in a crib in the preschool where she was executive director so she could run the preschool,” Carlson said. “Education is deep in my roots and I have some good role models and working moms, which is now relevant to me.”

Carlson was one of those kids who grew up talking about education reform at the dinner table. That’s because of who her family is. Her maiden name is Romer and Roy Romer, Colorado’s 39th governor, who in 1965 pushed to start what is now Metropolitan State University of Denver, is her grandfather.

Her father, Chris, is a former state senator, and co-founded American Honors, an organization that coaches community college students to move to 4-year schools. He also started the Colorado I have a Dream Foundation and he currently works at Guild as vice president of university partnerships.

“I sat at the dinner table growing up that talked about education all the time,” said Carlson, who has dueling Master’s Degrees in education and business from Stanford and spent her twenties working at education companies like American Honors and The Parthenon Group, as well working on Barack Obama’s presidential campaign and in the White House.

She noticed that only a small minority of full-time community college students graduated on time, or within two years of starting. A recent report from the American Association of Community Colleges put that figure at 12.6 percent, and after six years, completion rates for community college students were between 25 and 41.5 percent, depending on age and gender.

In business school, she struggled with the thought that universities and colleges spent an average of $4,000 to $6,000 advertising online to recruit students. And the big recipients were the Googles and Facebooks of the world. Often, first-year tuitions helped pay back that expense she said.

“That’s the forgotten part of higher ed,” Carlson said. “It’s still a business and the business model is upside down because of the increasing cost of digital advertising. It’s nobody’s fault but there are not many of us hoping Google and Facebook make that much more money.”

Guild gets paid an undisclosed tuition split from the universities. That cuts out the digital advertising middlemen. And Carlson said its advisors who coach students are agnostic and aren’t paid differently based on the college course.

Employees for Guild Education work from open space areas along with designated offices on November 30, 2018 in Denver. (Kathryn Scott, Special to The Colorado Sun)

Some colleges do spend millions a year advertising online to attract potential students. According to Educational Marketing Group, an education brand consultant in Parker, colleges and universities in the U.S. spent $1.65 billion advertising last year, an all-time high. And the amount is increasing by about $100 million a year.

“For the past six or seven years, enrollments overall have been declining so there’s a mad scramble to sustain enrollments in higher education,” said Bob Brock, the company’s president, noting these are conservative estimates. But, he added, “the majority of institutions waste a lot of money because they don’t do it terribly well.”

Carlson concluded there were two key reasons for low completion rates. Lack of money and a disconnect in how general education courses translate into a career.

“The narrative is always around where do people want to be but the lived reality is people are working in a restaurant or retail environment or somewhere on the 16th Street Mall,” Carlson said. “They understand what their companies do. They know what it means to be a people manager or what the median wage looks like and whether that could be a family sustaining job.”

Building a support system to function like a high school career counselor for adults was critical. Finding the financial support to help students was less clear. And while other efforts exist to help working adults pursue more education, many are small nonprofits that help a few dozen, maybe a few hundred students a year. Carlson wanted to help hundreds of thousand, perhaps even millions.

And then Guild stumbled on one of the best ways to spread the word about the education programs: Employers.

“We learned the employer could connect us to the people we want to serve (solving) that distribution channel and bring down that acquisition cost. Along the way, we found that the employers were actually willing to pay tuition, which was a great surprise,” Carlson said. “Turns out now, in the economic climate we’ve been in for the last few years and especially in the future of automation, employers are especially interested in providing education benefits and training and upskilling benefits.”

Rachel Romer Carlson, CEO and co-founder of Guild Education, meets with with Terrence Cummings, vice president for client success, and Nancy Holum, director of client success, for a team check-in brainstorming session from Guild’s downtown Denver offices on November 30, 2018. (Kathryn Scott, Special to The Colorado Sun)

Chan, with Felicis Ventures, said he sought out Guild because he knew employers are struggling with the future of the workforce. Automation and technology already allows customers to leave some stores with products paid and no interaction with an employee.

“They’ve got tens of thousands of sales people. Where do they go,” Chan said. “We just saw this as a trend that was happening and rather than wash our hands and say too bad for those people, we looked for meaningful companies who are changing this.”

While company-supported programs have existed for years, they are often limited to one school, like Starbucks, which offers employees a full ride to Arizona State University’s online program. Guild has more than 90 learning partners, including the University of Denver, plus access to 3 million adults working for its employer partners.

For employer partners, the attraction was, of course, financial, especially in this era of low unemployment rates. According to Guild, the benefit has improved employee retention to 98 percent, compared to the baseline of 71 percent.

And that’s why it clicks for companies and investors, including Fern Mandelbaum, a Stanford lecturer who mentored Carlson and Stich as students and ended up becoming one of Guild’s earliest investors.

“I think (Guild’s) growth is phenomenal. But no, it doesn’t surprise me at all,” Mandelbaum said. “When they started, it was really obvious to me that every company could and should partner with them. I’m not trying to sound like an ad for Guild but … we talk about hiring people but really the most important thing is how do you retain people? The fact that they were focused on that before everyone else is why they are growing so fast.”

The early results are in — and they’re good

Carlos Grajeda tried college after high school. It didn’t work out.

Nearly 35 years later, he tried it again because his employer, Chipotle, started subsidizing college courses through a partnership with Guild Education. In August, Grajeda, now 54, graduated with a bachelor of science in communication from Colorado State University’s Global Campus, the online program geared toward working adults.

“I remember the day I quit (at age 18) actually. There was a requirement for the program that you need to have some money to do it and I didn’t have any money. I remember thinking something along the lines that college was for rich people,” Grajeda said. “I was convinced that I couldn’t get a degree.”

Student Success Advisor Carlos Grajeda works from his desk inside the Guild Education downtown Denver offices on November 30, 2018. (Kathryn Scott, Special to The Colorado Sun)

Grajeda credits his Guild coach who helped him through management training courses and then encouraged him to try college. He no longer works at Chipotle because after graduating, he jumped at an opportunity to join Guild as a student success advisor, becoming the career coach that many working adults don’t have. But he credits his former employer for his success.

“Chipotle made it really easy for me. It cost me very little money to go. Working in fast food, you don’t make a lot of money,” he said. “…Some of the happiest moments of my life were moments when I was studying and doing well in school. I just want to help somebody do that too.”

Grajeda is one of thousands of working adults who have graduated or are going through college programs thanks to the connection with their employer and Guild.

And employers continue to reach out to Guild. Financial company Discover covers tuition, fees, book and supplies for its employees and the benefit starts on the employee’s first day. Lowe’s signed up with Guild to offer up to $2,500 tuition funding for trade-skill certification. Ride-sharing service Lyft offers an average of $4,220 per year to offset college costs for its drivers. And Walmart pays for nearly everything though it expects employees to pay $1 a day for the benefit.

Guild is carving out a new market, and doing so in a way that is changing lives forever — from cashiers at a local fast food store, investors looking for impact and tech workers who want something more out of a job.

“The education mission really resonated with me,” said Rusin, Guild’s vice president of engineering who was at the point in her career where she “wanted to focus on the impact of technology rather than just the technology.”

Her team has built the technology platform to help students search and discover education programs and manage their tuition. The tech also helps the company manage 10,000 potential new students inquiring every month.

For Mandelbaum, the early Guild investor whose Vista Venture Partners fund focuses on companies that help people reach their full potential, it was a lot about Carlson.

“As a student, she frankly was similar to what she is now. She’s thoughtful, driven, kind and compassionate as a leader. And as someone who wants to make the world a better place,” Mandelbaum said, “she’s creating a world where everyone has an opportunity to succeed. Guild is actually exactly what I invest in.”

Rachel Romer Carlson, CEO and co-founder of Guild Education, looks forward to a visit from her six-month-old twin daughters, Magnolia, left, and Lily Grace at her downtown Denver offices on November 30, 2018. Employees for Guild Education work from open space areas along with designated offices on November 30, 2018 in Denver. Rachel Romer Carlson, is CEO and Co-Founder of Guild. (Kathryn Scott, Special to The Colorado Sun)


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