The demand for developing the research done in Temple University laboratories into commercially viable products, as well as the increasing presence of venture capital funds, have created a climate that favors the creation of start-up` companies. Temple University will carefully consider all requests by faculty members who want to create businesses. Entrepreneurial activities by members of the faculty, done within the framework and guidelines of the University, can be a benefit to the University and have a positive economic impact on the state and the local community, and can enhance the quality of education for students. A key requirement is that care must be taken to separate clearly and cleanly the personal financial aspects of the entrepreneurial activities from the faculty member’s University activities. Faculty must also pay careful attention to their University duties and responsibilities.
The research missions of the professor’s laboratory at the University and of the company’s laboratory must be separate. While the goal of the University laboratory is to carry out fundamental research in a particular field, the company’s goal is to develop fundamental research results to the stage of commercialization. In the present context, fundamental research is defined as research into underlying principles and mechanisms, while developmental research is defined as research whose specific goal is the development of a product. Any research collaboration between the company and the University laboratory will be done under formal research agreements (research contracts or license agreements).
On the other hand, a Professor may wish to encourage funding basic research by a company for which he/she has vested interests in his/her University laboratory, in order to lay the ground work for future developments, or to support the infrastructure of the laboratory. This may be done under the form of a grant, with the proviso that all appointments shall be co-signed by the Chair of the Department (or Dean if the Professor is the Chair).
The company can exist on University premises in a location that is physically separate from the University laboratory; can be on University premises no longer than three years and cannot employ University personnel or students. The company cannot employ the professor for a period greater than the time he/she would normally spend consulting (one day per week) without an explicit agreement with the Dean. Finally, the company will keep records that clearly establish its developmental research activities.
An “Oversight Committee” will be established, with the responsibility to review, on a confidential basis, the research activities of the company and the University laboratory, in order to make sure that their respective activities remain separate and distinct. Each committee will be chaired by the Senior Vice President for Research or his delegate and have one person appointed by the start-up company and a third person to be identified jointly by the other two committee members.
Any use of University facilities by the company will be governed by specific agreements with the University which will include the payment schedule for the use of those facilities.
The University will hold an equity position in the company. However participation in the form of equity might not be the only participation Temple University will have in such start-ups. Returns from such an investment would generally be long term, if any. Therefore, Temple Office of Strategic Initiatives will, depending upon the characteristics of each start-up, propose mix of royalties and equity in order to accommodate the researcher, Temple University, and the financial partners. It is expected that Temple’s share of a start-up, incubated within Temple, would be at par with other North American institutions, depending on the potential of each individual case.
No student or postdoctoral fellow may be directly employed by a start-up company for work that is related to their studies, research, or their thesis. However, start-up companies may give either grants or contracts to any University laboratory. Such grants and contracts will be handled in a similar manner to a grant or contract given by any other third party.
Temple University must protect itself and its faculty, staff and students from any of the following allegations:
To protect against such dangers, all faculty members must certify annually to their school Deans their compliance with Temple's policies related to conflict of interest and commitment, and must disclose their outside professional activities and any financial interests in for-profit companies that they, and their immediate family members, have. In addition, faculty, staff, post-docs and students must disclose on an ad hoc basis any current or prospective situations which may raise questions of conflict of interest, such as those involving sponsored research, gifts, human subject protocols, licensing of intellectual property, procurement or other relationships with outside companies. Ad hoc disclosures are to be made as soon as such situations become known to the individual. Potential conflicts of interest will be assessed against the concerns listed above. Where there is a risk that the outside interest may have, or be perceived to have, a harmful effect on academic values, Temple University will take steps to eliminate, mitigate or manage the conflict.
Venture capitalists and other brokers are genuinely interested in entering into an agreement that is profitable for them. They may offer a wide range of alternatives but often it means a sizable share of the start-up for little investment. The Office of Strategic Initiatives will advise researchers on these specialized topics of a commercial nature and negotiate on their behalf. Financing a new venture is not, however, an easy task; often takes time and should not be rushed unduly. This office will ensure that the equity, royalty and other payments are properly balanced in terms of the company's capacity, and that they are in the best interest of both Temple and the researcher. Both are linked and likely to gain financially and otherwise from such an initiative.
The details of the process to be followed in establishing a start-up company on or off Temple University premises will vary for each individual case. Any professor who wishes to start a company should contact the Office of Strategic Initiatives prior to entering any commitment. This office will work closely with the professor to arrive at a satisfactory agreement.
The Office of Strategic Initiatives may also recommend further evaluation of the market potential or other approaches aimed at reinforcing the likelihood of attracting capital and avoiding unnecessary costs. The office has developed experience in dealing with start-ups, incubators, venture capitalists, etc. and is there to both facilitate technology transfer and protect Temple University's long term interests, as well as those of the researcher.
