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- Title
Accidental Founders: The Race from Class Project to Start-Up.
- Authors
Barron, Esther; Green, Darren
- Abstract
The very concept of entrepreneurship on the college campus has undergone a sea change over the past couple of decades: morphing from the quintessential dorm-room buddies hatching a far-fetched business idea over pizza late one night to groups of students deciding that the fictional business they created as part of a class curriculum actually "has legs." While each of these paths ultimately leads to the creation of a new business, the process, as students make the difficult leap from studies to profits, varies quite a bit. All start-ups enter the world with the odds stacked against them, yet the headwinds encountered by student groups endeavoring to become founding teams are something altogether different. This problem isn't going away anytime soon; in recent years, we have witnessed a veritable explosion in university class offerings geared towards the creation of fictional businesses and/or business plans by student teams. The authors of this article have seen first-hand many of the legal challenges that are uniquely relevant to businesses that are born in the classroom. Together we have advised hundreds of start-ups on a wide spectrum of legal issues, ranging from entity formation to founders' agreements to the myriad other balls that need to be juggled on the legal front in starting and growing a business. Many of these nascent businesses, especially in recent years, began as classroom collaborations expected to be nothing more than opportunities to learn. We have also taught a number of classes at Northwestern University in which students develop business ideas as part of the coursework. One of these classes is somewhat unique in that it includes groups of students from the law school, the business school, the engineering school, and the medical school. Students either form or are assigned to interdisciplinary teams ranging in size from five to nine individuals and made up of at least one participant from each school. The course stretches over two quarters. During that time, students shadow doctors at Northwestern Hospital, identify a market need or an area where something is not working efficiently, and develop a solution in the form of a medical device, mobile application, or other technology. The teams work with faculty supervisors, mentors, and other industry experts during the course to create a business plan and a working prototype. At the end of the class, each team presents to a panel of judges which includes venture capitalists, hospital administrators, faculty members, and entrepreneurs, and in return receives unfiltered, meaningful feedback. The course started more than a decade ago, which has afforded us the unique opportunity to follow several highgrowth, capital-raising businesses that emerged from these class projects. Far too often, unfortunately, our continued involvement with these businesses as faculty has resulted in a front row seat to founder intellectual property disputes, equity split disagreements among former students and all manner of other early-stage chaos, most of which could have been addressed and avoided with just a bit of forethought and planning on the front end. Our vantage point, both as lawyers for start-ups and faculty members at Northwestern Pritzker School of Law, has allowed us to begin to recognize patterns around the unique issues that often emerge when students find themselves becoming "accidental founders." Growing a business is a daunting task for any founding team, even more so with the added complexities of such an unusual company "birthplace." The purpose of this article is to highlight both the challenges and certain practical steps that students should consider, and professors may recommend, in order to best position companies that grow out of these courses for future success.
- Subjects
ENTREPRENEURSHIP; CORPORATE founders; NEW business enterprises; BUSINESS planning; COLLEGE curriculum; BUSINESS education
- Publication
Stanford Journal of Law, Business & Finance, 2020, Vol 25, Issue 1, p86
- ISSN
1078-8794
- Publication type
Article