Michael Sexton created a business plan for a real-estate training program and presented it to Donald Trump looking to pay Trump a flat fee for the use of his name. Trump instead decided he wanted to be the principal owner.
Trump University was incorporated in 2004 by Trump, Sexton, and Spitalny, as a New York limited liability company. Donald Trump owned 93% of the company. On May 23, 2005, Trump University formally launched its education program. At the opening presentation, Trump said: "If I had a choice of making lots of money or imparting lots of knowledge, I think I'd be as happy to impart knowledge as to make money". The company's original business plan focused on online education, but quickly expanded to include live, in-person instruction as well. The focus of the instruction was real estate investing, with Trump claiming in advertisements, "I can turn anyone into a successful real estate investor, including you." Typically the instruction began with an introductory seminar in rented space such as a hotel ballroom. At the introductory seminar, students were urged to sign up for additional classes, ranging from $1,495 seminars to a $35,000 "Gold Elite" program. Records produced indicate 7611 tickets in total were sold to customers attending courses. Approximately 6,000 of these tickets were for a $1,500 3-day course and 1,000 tickets were for silver, gold or elite mentored courses ranging in price from $10,000 to $35,000.
Trump claimed that students gave 98% favorable reviews to the program. But according to some former students, Trump University employees pressured students to offer favorable reviews, told them they had to fill out the forms in order to obtain graduation certificates, and did not undertake procedures often used to ensure that surveys were filled out objectively.
In an infomercial, Trump said he "handpicked" Trump University's instructors. He testified in a 2012 deposition, however, that he never selected the instructors for the program. According to Michael Sexton, Trump signed off on the school's advertisements. For a time in 2008 it used the name Trump Wealth Institute. In June 2010, "Trump University" changed its name to "The Trump Entrepreneur Initiative." It largely ceased operations in 2010.
The Trump Institute was a separate business. It was licensed by Trump University and Donald Trump received a cut of every seat sold, but Trump University did not own any part of it. It was owned and operated by Irene and Mike Milin of Boca Raton, Florida. It offered real estate seminars from 2006 to 2009, at which point the licensing agreement expired and was not renewed. Trump himself was not involved in the operation of the Trump Institute, but he recorded a broadcast infomercial promoting it and appeared in an introductory video before each seminar.