Since Facebook's success, startups seem to be in the spotlight more than ever. Stanford University announced that a record-breaking 16% of 2011 business school graduates started their own companies after graduation. This number surpassed the 12% peak during the dot-com bubble. Legendary venture capitalist Peter Thiel has created a program encouraging students to drop out of, or delay attending, post-secondary so they can pursue entrepreneurial ambitions. The Thiel Fellowship chooses candidates under the age of 20 and offers no-strings attached, $100,000 grants for young entrepreneurs so they can follow their passions for two years. The first Thiel Fellows were announced in May 2011. The 2012 class was announced recently, and the deadline for the 2013 fellowship is Dec. 31, 2012. The thought behind the fellowship is that some ideas just can't wait four years for you to finish college.

SEE: Follow Your Passions And Success Will Follow

Who Better to Learn From?
If you are not familiar with Peter Thiel, you may be surprised to learn just how familiar you are with some of the companies he has helped create. In 1998, Thiel co-founded PayPal with Max Levchin. The company went public in 2002 and was acquired by eBay for $1.5 billion that same year. He started the hedge fund Clarium Capital, co-produced the movie "Thank You for Smoking," was a partner at the Founders Fund venture capital firm and was the first outside investor in Facebook. His original $500,000 investment in Facebook was worth roughly $2 billion when the company went public in May. If you're looking to launch a business, and need to know some wealthy venture capitalists, not many people would make a better potential mentor and partner than Thiel.

SEE: 4 People You Never Knew Made Millions From Facebook

How Does It Work?
Thiel Fellows are handpicked based on their applications. Once all fellows are chosen, they are encouraged to move to the San Francisco Bay Area. Fellows have access to mentors and other entrepreneurs that can help or inspire them over the two years. Fellows are paired with industry mentors that have experience in related fields. Previous mentors have included: John Chisholm, Michael Ellsberg, Desiree Dudley, Michael Gibson and Bill Hunt. The fellowship does not require you to start a business at the end, but it prohibits employment or educational enrollment during the two-year fellowship. The $100,000 grant is given in monthly installments beginning on the fellow's start date. Funds may be used for anything, including living and business expenses. The fellowship is designed to encourage fellows to follow their passions and network with important industry contacts. Fellows are provided with meaningful experiences that can help them to advance the fields of science or technology.

Why Join the Fellowship?
The Thiel Fellowship has received much scrutiny from critics claiming that Thiel is sending the wrong message to young people. We all know few startups succeed in the long term. When they do, founders generally end up receiving massive financial rewards. However, very few flourish and grow into billion-dollar corporations. A 2009 study by Harvard Business School found that only 22% of startups backed by venture capital succeeded. Thiel argues student debt is the highest it has ever been, and today it is now the top form of debt in the country at around $1 trillion. According to statistics released by the American Student Association, around 60% of the 20 million Americans attending college every year borrow funds to help pay for education. The average student loan balance is roughly $24,301 as of the first quarter of 2012. Combined with the an unemployment rate near 13.5% for individuals aged 20-24 years old, Thiel feels that the time has never been better to become an entrepreneur. Some sources have even gone as far as comparing the fellowship to football players that decide to play in the NFL rather than attending school when they get drafted.

SEE: 6 Alternatives To Going To College

The Bottom Line
The program is receiving a great deal of controversy, but both sides make valid arguments. Studies have proven time and time again that people with college degrees tend to make more income throughout their working careers. Many people feel experience far outweighs the education students would learn from any textbook. Fellows still have the option to attend college after the fellowship, or they can drop the fellowship and forfeit the grants if they choose.

Thiel is not completely against education. Remember, he is a professor at Stanford University. Thiel just feels college may not offer the same benefits it once did. If starting your own business is your ultimate goal, you most likely have all the skills you need already, so why wait. History has shown that three major tech companies were founded by college dropouts: Bill Gates, Steve Jobs and Mark Zuckerberg. College will definitely help you develop new skills, but in most cases it does not provide you with the skills to start a company. Thiel is offering his network and years of experience.

SEE: 7 Hedge Fund Manager Startup Tips

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