Commonly Asked Questions Regarding Startup Ventures
- What qualifies as a UT Dallas startup?
- What are the realities of establishing a new business?
- Am I, as UT Dallas faculty/staff member, permitted to start a company and remain at the university?
- Can I license from the university a technology that I invented while at UT Dallas for my company?
- Will UT Dallas help me with my company by providing business advice and/or financing?
- What do I need to do in order to license a technology from UT Dallas?
- Can my new company apply for SBIR and STTR grants that will list UT Dallas as a subcontractor?
- Can I temporarily use my research laboratory for my company until the company gets on its feet? Will UT Dallas permit my startup to use UT Dallas space or equipment?
- Will starting a company influence my ability to get tenure?
- Do I need permission to set up a company?
- Can I consult for a company, or hold a board seat or a line management position with a new company?
- Am I able to receive equity in a new company?
- How may my students be involved in work for my new company?
What qualifies as a UT Dallas startup?
A UT Dallas startup is simply a new business entity or “spinoff” formed to commercialize one or more university-derived inventions or intellectual properties. Formation of a startup business is an alternative commercialization approach to licensing the invention to an established company.
What are the realities of establishing a new business?
Starting a new company requires a substantial commitment and sacrifice of time and resources on the part of the founder(s). The reality is that the vast majority of new ventures fail, even when the technology at the foundation of the company appears to have significant commercial potential. The quality of the science or technology behind a startup is but one factor that may enable the success of the enterprise. The most important factor to the success of any new enterprise is ultimately the experience and capability of the management team and their execution intelligence.
Formation of a startup to commercialize a UT Dallas invention should follow careful and extensive consideration by the inventor(s). Several key factors will influence the success of a new venture, including the following:
- A proprietary (patentable) product or process that is both novel and significantly superior to competing products on the market.
- The cost and timeline to develop the product fully and bring it to market
- The cost to manufacture the product
- The ability of the technology to provide a platform for follow on product opportunities
- A favorable market environment (one that is ready for the product)
- Availability of investment capital from those who may enhance the success
- Complete commitment of the inventor(s) to the commercialization process
- Attracting a management team experienced in business (important to investors, as well)
- Access to facilities
It is essential that the entrepreneur take time to be educated in the entrepreneurial process and be willing to accept mentoring from experienced entrepreneurs. For a more comprehensive list of criteria to consider regarding evaluating a technology for startup potential, please see the Commercial Viability Assessment tool.
Am I, as UT Dallas faculty/staff member, permitted to start a company and remain at the university?
Yes, but you will be required to fulfill all university duties, commitments and responsibilities you have now and your time away from the university must comply with all university policies. Also, your involvement with a new enterprise will require management of the relevant conflict of interest issues, including with respect to graduate students, research and intellectual property ownership. For more information you should speak with the staff of the OTC and consult the conflict of interest policy under Polices and Guidelines.
Can I license from the university a technology that I invented while at UT Dallas for my company?
Yes. However, any invention created by you at UT Dallas would proceed through the licensing process as with any other company.
Will UT Dallas help me with my company by providing business advice and/or financing?
Prior to making a decision regarding the best approach for commercializing a UT Dallas invention, the OTC would seek input from the inventor to determine the recommended options. Should a startup be both desirable and feasible, UT Dallas is able and willing to actively assist with launching a new business. Please re-read the list of resources described at the top of this page and/or further explore the Institute for Innovation and Entrepreneurship website.
What do I need to do in order to license a technology from UT Dallas?
Contact OTC to discuss your interest in licensing the invention. OTC, in consultation with the inventor, will weigh the commercialization options to determine if the most favorable commercialization approach is to license your company or an established company. Should UT Dallas agree that a startup be the licensee, then OTC can assist the process.
Can my new company apply for SBIR and STTR grants that will list UT Dallas as a subcontractor?
Yes. However, research funding received into your laboratory from a company in which you own financial interest creates a conflict situation that requires approval and oversight. This oversight would include an unrelated overseer to review both the research and finances of any project in your laboratory, which is supported by your company. To avoid additional conflict, you should not be the UT Dallas principal investigator on any project funded by your company.
Can I temporarily use my research laboratory for my company until the company gets on its feet? Will UT Dallas permit my startup to use UT Dallas space or equipment?
No. You may be able to support or sponsor research on the technology at the university, as any outside company can sponsor. However, there are requirements for oversight of the research which must be discussed with the Conflict of Interest committee, in order to manage any possible conflict.
Will starting a company influence my ability to get tenure?
This would be the decision of the departmental chair, dean, and provost.
Do I need permission to set up a company?
No. However, if UT Dallas-derived technology needs to be licensed to the new startup, approval and a license from OTC are necessary, along with compliance with all UT Dallas policies including conflict of interest policies.
Can I consult for a company, or hold a board seat or a line management position with a new company?
Yes. However, disclosure of such involvements and compliance with all UT Dallas conflict of interest policies is mandatory. This is also usually permissible without consultation with the conflict of interest committee. It should be noted that some federal agencies mandate disclosure of consultancies for which compensation exceeds a specified threshold. Additionally, pursuant to the UT Dallas policy no more than 20 percent of one’s total professional effort may be directed to outside work during the academic year.
Am I able to receive equity in a new company?
Yes. Holding stock (or stock options) in the startup company is allowed. The investigator may receive stock as partial compensation for his/her role on the board of the company and/or as a founder of that company. The distribution of such equity will be determined by the investigator’s agreement with the startup itself. However, the inventor does not participate in the distribution of any equity received by UT Dallas through license agreements.
How may my students be involved in work for my new company?
Involving students and/or post-docs in UT Dallas research that would benefit the new company is considered a conflict. Involving students and/or post-docs more directly in the company (as employees or consultants) also raises conflict of interest issues. Consultation with the dean and/or the is generally required in order to ensure that the student’s/post-doc’s educational experience is not compromised.