February 15, 2011

10 Tips for Student Entrepreneurs

Starting your own company out of university is a tricky business. You tend to have other things on your mind – like getting your degree. Here are some practical tips for university students who want to commercialise their technology.

1. Write Everything Down: Most university ventures are formed around intellectual property so you need to make that foundation as strong as possible. It is nearly impossible to retro-actively “clean up” your patents. Keep good lab books, use books with numbered pages and get your supervisor to sign your books every month or so. Keep your emails, time-stamp documents and use good backup policies for digital data. The US still uses a “first to invent” framework for patent priority. While your start-up is unlikely to engage in the legal wrangle known as interference, your future acquirer or licensees will be much more comfortable with a well-developed history (and comfort translates directly into dollars).

2. File Disclosures: Get into the habit of writing a short invention disclosure BEFORE you write your papers. In fact, I recommend that you write the invention disclosure as soon as you have clarity about your research path. They are free and don’t take long. Frequent disclosure writing will give you a good case history for your inventions but, more importantly, it gets you into the habit of thinking about invention as deliberate acts in your university life.

3. Talk to your Tech Transfer Office: Your Tech Transfer Office can help you manoeuvre through a lot of the early challenges. And they (usually) do it for free. Establish a relationship with the relevant tech transfer officer and keep in regular contact. They love hearing from students so don’t feel like you are intruding.

4. Don’t rely on your Tech Transfer Office: While a great sounding board, the Tech Transfer Office isn’t going to build your business for you. They can’t (no money, no staff, no risk capability). Every university has dozens if not hundreds of inventions where the inventors are just waiting for the Tech Transfer Office to “make it happen”. It won’t, until you get out there and build the business.

5. Leverage your Supervisor(s): For probably the last time in your career you are surrounded by world-class scientists who will help you for free. Beyond the obvious assistance with technical issues, you can ask them for advice on your business plan, for funding options, and even for networking suggestions. They will likely know a lot more potential investors, collaborators and business partners than you. Even a professor without any start-up experience will add credibility to your venture, especially for non-venture funding (e.g. commercialisation grants).

6. Network on Campus: Reach out across campus for other professors in related fields, other graduate students and anybody else who might be helpful. Most high value innovation comes from the overlap of problems and solutions form different technical fields. Try to find collaborators in different departments who can help you with specific problems but also broaden the scope of your project. For example, I started in the Physics department but early on set up collaborations with Computer Science for much of the core algorithm development.

7. Network off Campus: It might feel like it, but you really aren’t the first student to launch a company. Lots of people have done it before or contributed to new start-ups via funding, mentorship or executive work. But you will almost never find them on campus. This is one of the inherent problems of university spin-outs: Success implies departure. So you have to get out into the broader community and build relationships. Try to especially find those university entrepreneurs who have come before you but are still accessible enough to be of immediate help to you. Meet-Ups and entrepreneurship events are a good start for this, but ultimately nothing beats asking your Tech Transfer Office for past spin-outs and contacting the corresponding CEOs directly. Play the alumni angle for all it is worth!

8. Get Start-Up Grants: Canada offers some great ways to seed-fund your early commercial activities without giving away equity. Many of these options are tied to universities (e.g. the I2I program provides funding for university-industry pre-commercial collaboration). At BrightSide we raised in the neighbourhood of $6M in equity financing (over many rounds). Effectively matching this was another $5M in various grants and credits – many of which were only made possible through our close collaboration with universities. Not only is this free money, it can greatly reduce the cost of venture money later on.

9. Learn to be a Leader: Creating your own company will challenge your leadership skills. The university environment is a great place to practice those skills in relative safety. Don’t fall into the trap of becoming the lonely grad student at the bottom of the hierarchy. At the very least get some undergraduate students into your project and function as their supervisor. This will require some coordination with your professor but is well worth the effort. Those students are also a great source for initial hires into your start-up once you leave campus.

10. Start Now, Don’t Wait: More important than everything else, start now! Don’t wait until your degree is comfortably completed. Get out there, start a business and push forward. Set up a company, even if it is just a shell early on. Aside from immediate benefits such as tax credits (if you set up your employment with the company properly), this will force you to reach out to the world. Go out, learn about the market and then push your research efforts into the right direction. The faster and earlier you can start this iteration, the more value you will get out of your graduate research when you finally switch it into your start-up.

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