Startup resources

A great idea needs people to make it successful. You don’t have to hire full-time staff, which most startups can’t afford; but you will need help. Identify key team members — ideally whose skills and experience complement yours — and the roles they will play in moving your discovery along. 

These people can be any of the following: 

• Employees
• Directors
• Scientific advisors
• Research collaborators
• Consultants
• Business partners 

Faculty considering commercialization often ask, “Would I have to leave my job at KU?” The answer is no. Although both KU and another company can’t simultaneously employ you, you can have a non-employee role at the company as a collaborative researcher, board director, shareholder and/or consultant. Some faculty even take a sabbatical to dedicate themselves to the startup for a few months while it gets off the ground.

Once you’ve decided to go for it, generally the first step is to legally form a company. There are several different business structures, each with its pros and cons. For help understanding these pros and cons and which structure to choose, entrepreneurs may want to seek formal legal or tax advice. 

• Sole proprietorship: A sole proprietorship is the most basic type of business to establish. You alone own the company and are responsible for its assets and liabilities.
• Limited liability company (LLC): An LLC is designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.
• Limited liability partnership (LLP): A partnership in which all partners (depending on the jurisdiction) have limited liabilities; one partner is not responsible or liable for another partner’s misconduct or negligence.
• Nonprofit 501(c)(3): A tax-exempt nonprofit organization in the United States.
• C-corporation: Refers to any corporation that is taxed separately from its owners.
• S-corporation: An S-corporation is similar to a C-corporation, but the corporation’s income or losses are divided among and passed through to its shareholders. They must then report the income or loss on their individual income tax returns.

What is the company’s ultimate destination, and how will it get there? These are the questions you will answer in a business plan. The value of a business plan isn’t so much in its mere existence as it is in the process of writing it. Expect a well-written business plan to take weeks or months to complete.

The process will involve researching the market, articulating the value proposition of the product, interviewing prospective customers and partners, talking to thought leaders in the field, putting together budgets and timelines, and identifying the main risks along with strategies for mitigating those risks.

We encourage you to consult this sample commercialization plan (.docx). 

For assistance developing your own business plan, visit the KU Innovation Park website. 

You have a company and people, and you've made the plan. Now you'll need to get a license from KU that gives your newly formed company the rights to commercialize the intellectual property (IP).

Licensing forms can be found on our website in the Licensing KU Intellectual Property section. 

A critical next step is deciding what funding sources are available for your newly formed company. Below are a few options, each with its own unique benefits:

• Self-funding: This means using personal funds, credit cards, and/or contributions from family and friends. While this route can help you retain equity, these funds often run out quickly, as businesses are undercapitalized.
• Angel investors: These early investors are not just a great source of funding, but can also serve as mentors as they tend to have deep expertise in certain areas. The Oread Angel network was created for connecting KU-affiliated investors and entrepreneurs to accelerate innovation and investment within the Jayhawk community. Visit the Oread Angel Investors website to learn more.
• Venture capital: This is a great option when a business needs more than a few million dollars. VC firms require considerable equity, but their expertise and vast access to cash can bring the necessary momentum for many companies to make it to the next level. The Hill Fund was built to support KU alumni founders. It’s Jayhawks investing in Jayhawks. Learn more about this fund by visiting the Hill Fund website.
• Grants: These are funds that don’t require repayment and are available from either governments (federal or state) and/or foundations. They were created to invest in ventures whose outcomes can positively impact their missions. The Small Business Innovative Research (SBIR) and Small Business Technology Transfer (STTR) programs are non-dilutive seed funds for developing a path toward commercialization. Visit the SBIR website for more information.

After a license has been signed, KUCTC stays in touch with its startups. Most licenses will include certain milestones, due dates and payments that KUCTC will monitor. 

We understand that plans often change and startups must be nimble when managing product development, fundraising and commercialization. When changes happen, please remember to communicate with KUCTC. As your partner in innovation, we may have suggestions to help navigate these rough patches.

A conflict of interest (COI) is a situation where an individual derives personal benefit from actions or decisions made while acting in their official capacity.

When university employees decide to start a company based on their university research, this can create conflicts of interest. These potential conflicts can take many shapes and can relate to the use of university resources, hiring and progress of students, intellectual property, use of university space, etc. The good news is that most conflicts can be addressed through work with the university’s COI teams and creation of an appropriate management plan. 

KUCTC recommends discussing your interests with the appropriate COI team prior to starting your company so they can offer advice about relevant policies. 

For campus-specific conflicts of interest, visit the KU Lawrence COI office website or the KU Medical Center COI office website. 

In most cases, KU startups are licensing early-stage innovations that require additional research and development before becoming a “product." In some instances, it may make sense for certain additional research and development to be conducted in the innovator’s KU lab (provided an appropriate COI management plan is in place). When planning that work, it is important to keep in mind the following questions:

• Who will be the principal investigator and oversee the project (generally someone other than the innovator)?
• What is the scope of work, and why is the innovator's lab the appropriate place for that work to be done?
• Who will be involved (students, postdocs, technicians, etc.)?
• How is the project distinct/separate from any ongoing research being conducted by the principal investigator?

These questions (and more) may need to be addressed prior to the start of any project, so thinking through them early will help get projects off to a productive start.

More information can be found on the Industry-sponsored Research webpage. 

KU intellectual property

The U.S. Bayh-Dole Act of 1980 allows universities to own the rights to inventions and other intellectual property developed using federal funds. This act, along with the KU IP policy, specifies what intellectual property is owned by KU. A KU startup company should have an agreement in place with KUCTC before using intellectual property owned by the university. There are a variety of agreements meant to fit the needs of our startups, including allocation of rights, material transfers, options, and license agreements. Visit the Licensing IP from KUCTC webpage for additional information. 

Startup intellectual property

A growing startup company will utilize many different forms of intellectual property and protect it in a variety of ways. Patents, copyrights, trademarks and trade secrets are the most common forms of protection. Each is governed by different laws, procedures and requirements for maintaining the protection. It's important for a company to consider its intellectual property strategy as it matures to ensure that it matches the startup’s goals for growth and available financial resources. 

While working together, a startup and KU may jointly develop new intellectual property. Such intellectual property should be disclosed to KUCTC so it can be evaluated to determine whether it's owned by the startup, KU or both. The ownership will determine if any additional agreements are needed. General questions related to KU intellectual property and licensing can be directed to kuctc@ku.edu. 

Setting up a fully equipped laboratory can be very expensive for a startup company. KU has a number of core research facilities that provide services to outside parties, including KU startup companies. Specialized lab equipment not available in core facilities may be accessed through a facilities use agreement (based on equipment availability). This type of agreement is required for any startup that wishes to utilize university equipment or space. Visit the KU Lawrence Core Labs webpage or the KU Medical Center Core Labs webpage for more information.

One of KUCTC’s key partners, KU Innovation Park (KUIP), is a community for cutting-edge researchers, business leaders and creative entrepreneurs actively working to bring innovative ideas and solutions to commercial markets. With three buildings in Lawrence, KUIP provides a comprehensive range of business management assistance and services, in addition to leasing highly specialized wet lab, dry lab and professional office space to bioscience and technology companies. 

The Kansas City area also offers a number of other incubator spaces for companies of various sizes and maturities.