New Company Formation?
Is Starting a new company the best option?
University startup formation most often involves a faculty member who teams with a PhD student or post-doc to participate in the creation of a company based on their research. Frequently, this team will also include an experienced entrepreneur or an MBA student from the business school. Sometimes a tenured professor will even take a sabbatical leave to start a company, but more often faculty remain at the university and act as an advisor to the new company formed around the invention.
If you are a faculty member, post-doc or grad student who is contemplating participation in a startup venture to commercialize UC San Diego technology, there are many things to consider.
Several Important Startup Considerations:
- First of all, be honest with yourself ─ what would be your motivation to start a company?
What do you want out of it, and what are you willing to put into it? It’s great to be excited about something, and doesn’t necessarily hurt to be somewhat ego-driven, but you do need to be realistic about the venture ahead of you, as well as the prospects for success. And, it’s almost impossible to be realistic without having had any industry experience, so seek an experienced mentor who can guide you through the decision-making. UC San Diego-based commercialization assistance, including access to industry-experienced advisors, is available through The Basement, or the von Liebig Entrepreneurism Center within the Jacobs School of Engineering.
- Do you believe the technology constitutes a potential “platform”?
In other words, can you envisage multiple products (possibly addressing needs of diverse markets) emanating from the core technology?
- Are UC San Diego patent applications pending with broad claims?
Are you (and an outside patent attorney) confident they will be allowed eventually in issued patents?
- Is the expected technology development time and cost well understood, and are the associated market opportunities large enough to rationalize such an investment?
Is your answer an “opinion”, or could you convince investors you are an expert in the particular area of technology application?
- Do major corporations dominate the market(s) in which you intend to compete?
Overall, the answers to these basic questions will either make it easier or harder for you to recruit an experienced team to take on such a challenge, and correspondingly will either encourage or discourage potential investors in joining you in a startup effort to pursue these opportunities.
NOTE: Before you take the steps of company formation or initiate meetings with professional investors, you should become familiar with the principles of The Lean Startup, which is discussed more thoroughly in the section on Business Model Design.
Minimally, you should invest a reasonable amount of time in the evaluation of business model options, as is demonstrated in this brief video, and to challenge your product/market fit assumptions by conducting interviews with potential customers. This exercise might even change your mind about who should join you as a co-founder!
To be better prepared for even the earliest interactions with potential investors, you may want to seek assistance in preparation. In addition to the aforementioned Jacobs School of Engineering resources, you may also find valuable assistance through MBA students participating in the UC San Diego Rady Business School’s Lab to Market program.
UC San Diego Policy Guidelines
If you decide that the technology with which you are involved would be most effectively developed and commercialized through a new company formation, and you are interested in participating in the venture, there are several UC San Diego guidelines with which you should become familiar.
Among the aspects that you will want to consider are the roles you could perform within the new company and still maintain a full-time employment status at the university. Additionally, you would want to know the guidelines for company stock ownership and consulting arrangements that would avoid potential “conflicts of interest, or conflicts of commitment” to the University of California.
All such policies and guidelines are issued and managed by the UC San Diego Conflict of Interest Office.