Information you need to know
Starting your company
Founding a company based on Mizzou research
Translating academic innovations into products, services and businesses helps the economy and improves people’s lives. When MU employees participate in commercialization activities, they are making important direct and indirect contributions to the strength and vitality of the university’s research and economic development missions.
MU innovators interested in starting a company based on Mizzou research can take advantage of many university programs. The purpose of this guide is to share those resources and to inform innovators about requirements necessary to maintain the integrity of the institution through appropriate oversight and a high degree of transparency.
Conflict of interest
A conflict of interest is defined as a situation in which an individual is in a position to derive personal benefit from actions or decisions made while acting in an official capacity.
When university employees decide to start a company based on their university research, this creates a conflict of interest. This conflict may include use of university resources, hiring students, intellectual property, university space, etc. Most conflicts can be addressed through a Conflict of Interest Management Plan and result in a successful outcome for both Mizzou and the university employee.
University employees are required to disclose potential conflicts of interest before starting a company or other outside activity by completing a Conflict of Interest/Conflict of Commitment Disclosure Form through eCompliance.
For questions, please contact the Conflict of Interest office at 573-882-3841 or coi@missouri.edu.
Conflict of commitment
A conflict of commitment refers to a situation where the time and effort devoted to a startup company or other external activity interferes with an individual’s full-time duties as a university employee.
MU requires that outside interests must not interfere with an employee’s university responsibilities. The dean and department chair are responsible for managing potential conflicts of commitment.
You must consult with your supervisor before starting a business.
For questions, please contact the Conflict of Interest Office at 573-882-3841 or coi@missouri.edu.
Vendor conflict of interest
A vendor conflict of interest happens when a company that sells products to Mizzou is owned by a university employee (e.g., a faculty member has a startup company that sells medical supplies to MU Health Care).
When this situation occurs, the startup must go through a procurement approval process before selling products to MU or any other institution in the University of Missouri System. The proposed activity must be disclosed on a Conflict of Interest/Conflict of Commitment Disclosure Form through eCompliance prior to contract approval.
For sales to MU Health Care, please contact the UM System Finance Support Center at 573-884-1234 or financesupport@umsystem.edu.
For sales to other units within MU, please contact the MU Division of Finance at 573-882-7254 or mucontract@missouri.edu.
Startup sponsored research
Many startups are based on technology that is not “commercial ready,” or developed enough for the marketplace. It is possible to continue performing research on the technology in the innovator’s lab provided a Conflict of Interest Management Plan is in place prior to the start of any research, and that plan is followed.
The plan should include:
- The principal investigator for the project (someone other than the innovator).
- The scope of work. (Could it be done elsewhere?)
- The role of other MU employees.
- Conditions for graduate or undergraduate student participation. (Who will supervise and mentor them?)
Please plan ahead. A Conflict of Interest Management Plan takes time to put into place and must be done before research begins.
For questions, please contact the Sponsored Programs Administration at 573-882-7560 or grantsdc@missouri.edu.
Small business funding
The federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are sources of late-stage translational research funding for startups.
Requirements and tips:
- The SBIR principal investigator must be primarily employed (51%) by the startup.
- STTR requires the startup to collaborate with a research institution.
- An awardee may sponsor research in the founder’s MU lab with conflict of interest oversight.
- Applications should budget the maximum “profit” allowed (i.e., this can be used for intellectual property costs).
- Startups will need to register with these databases before they submit an SBIR or STTR application (see Small Business Association tutorial about required registrations):
- System for Award Management (SAM); where your company will be assigned a Unique Entity Identifier (UEI)
- Grants.gov
- Small Business Administration
- If MU is included in the application, a letter of commitment and a planned research subaward budget are required. See UM policy for sponsored programs and awards.
For questions, please contact the Sponsored Programs Administration at 573-882-7560 or grantsdc@missouri.edu.
Account management
The MU Sponsored Programs Administration oversees the funding for all sponsored research, whether the startup company funds the research directly or with flow-through funding from an SBIR or STTR award.
The principal investigator for the MU research project is responsible for personnel working on the project and expenditures charged to it.
Please use common sense. Do not make purchases for your startup using a university MoCode or use your university lab to work on activities that are not part of an agreement between your startup and MU.
Intellectual property ownership is generally tied to funding sources. If a funding source is used to develop the intellectual property (whether it should have been or not), any third-party rights will apply.
For questions, please contact the Sponsored Programs Administration at 573-882-7560 or grantsdc@missouri.edu.
Intellectual property ownership
The U.S. Bayh-Dole Act of 1980 allows universities to own the rights to inventions and other intellectual property developed using federal funds. Most universities follow this act for all intellectual property created at the university, regardless of funding source. Technology transfer offices comply with the regulations of the Bayh-Dole Act and facilitate commercialization of university technologies to benefit society. The Bayh-Dole Act requires universities to share income received from commercialization activities with inventors/authors.
The ownership of intellectual property at Mizzou is governed by University of Missouri System Collected Rules and Regulations 100.020 and 100.030. In most cases, MU owns intellectual property developed using university resources.
For questions, please contact Technology Advancement at 573-882-6013 or techadvancement@missouri.edu.
Startup access to intellectual property
A startup company must have an agreement in place with the Technology Advancement before using intellectual property owned by the university. The type of activities that require an agreement include creating a company website, applying for SBIR or STTR funding, talking to customers and investors, etc.
There are different kinds of contracts, including allocation of rights, material transfer, option and license agreements. Please work with Technology Advancement Office to understand the purpose of each agreement, when they should be put in place, and the financial obligations of the startup.
After the startup secures funding and employees, newly developed intellectual property is evaluated to determine if it is owned by the startup, MU or by both. The ownership will determine if an additional agreement is needed.
For questions, please contact Technology Advancement at 573-882-6013 or techadvancement@missouri.edu.
Intellectual property strategy
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 is important to have an intellectual property strategy that matches the startup’s goals for growth and fits the company budget. For example, in just a few years without careful planning, a technology with a single provisional patent application can turn into one with multiple applications in multiple countries and hundreds of thousands of dollars in present and future costs.
Please contact Technology Advancement at 573-882-6013 or techadvancement@missouri.edu for assistance in developing an intellectual property strategy.
Equipment
Setting up a fully equipped laboratory is usually cost prohibitive for a startup company.
MU has a number of core research facilities that provide services and specialized equipment available on a fee-for-service basis.
Common lab equipment not available in core facilities can be accessed through an equipment rental agreement. This type of agreement is generally required for any startup that has an agreement to utilize university space.
For questions, please contact the Division of Research at 882-9500.
Services
A startup based on university technology and located in university space or at the Missouri Innovation Center has access to university resources through a business services agreement.
Fee-based services:
- Startups can submit protocols and obtain Institutional Review Board and Animal Care and Use Committee approval for research with human and animal subjects.
- Startups may use Environmental Health and Safety services, such as staff training and disposal of hazardous chemical, biological or radioactive materials.
No-cost resources:
- Startup personnel located at the Missouri Innovation Center can use services and resources provided by University Libraries.
For questions, please contact the Conflict of Interest Office at 882-3841 or coi@missouri.edu.
MU research space
Location is an important consideration for a startup company. While it may seem easiest to locate the company inside the innovator’s lab, it is far from a best practice and is possible only in the rare case when a lab has specific resources needed for the company’s success. Even then, strong safeguards for the university would be required, ranging from proper insurance to a comprehensive conflict of interest plan.
Other factors that likely would prevent the company from co-locating in the innovator’s lab:
- The university’s priority is for investigators to conduct MU research in campus spaces.
- Commercial activities are not allowed in MU buildings constructed with tax-free bonds.
For questions, please contact the MU Division of Finance at 573-882-7254 or mucontract@missouri.edu.
Missouri Innovation Center
The Missouri Innovation Center (MIC) provides full-service incubation programming for startup and early-stage life science ventures. In addition to offering coaching, mentoring, entrepreneurial finance assistance and other services, the MIC operates and manages the MU Life Science Business Incubator located in the university's Research Commons area. The facility features wet lab suites, office spaces, conference rooms and shared amenities.
MIC resident clients enjoy access to university services, such as library resources and specialized services/equipment at research core facilities. They also benefit from mentoring, business counseling, grant writing assistance, educational programming, networking opportunities and more.
For questions, please contact the MIC at 573-884-0496 or mumicincubator@missouri.edu.
Other locations
There are many locations within Columbia and surrounding communities available for startups. Often, companies begin in the home of the innovator. Additional options range from co-working spaces to full-fledged business offices and manufacturing plants.
Generally, a business license is required for the location as well as compliance with zoning and use permits. Several local realtors cater to the commercial market and can provide information about options and required zoning compliance.
Company formation
Legally forming a startup under Missouri law is a deceptively simple process. Before incorporating your startup, it is a good idea to consult with an experienced attorney and a tax professional to determine which of several common strategies will work best for your venture. Decisions made during this process have tax consequences and can have a huge impact on founder liability and the ability to raise private investment.
It also is important to have a plan and vision for the startup before its incorporation. For example, do you want to develop the technology and exit quickly, grow it and go public, or something in between?
MU’s technology business counselors are available to assist and introduce startups to university resources, including the Entrepreneurship Legal Clinic at the School of Law and MU Libraries entrepreneurship resources.
Company operations
Startup companies are often formed because of a promising technology. Innovators typically are focused on proof of concept, or proving that the technology works. However, a company is more than a technology.
Careful thought and consideration should go into building a startup team that will operate the company and turn it into a profitable business. Accomplished chefs don’t always make the best restaurant owners, nor do the best innovators always make the best startup CEOs. This is because different skills are needed for the different roles.
Expertise needed to own and operate a successful technology-based business is available both locally and nationally. In addition to finding seasoned industry mentors and hiring staff who are technically proficient, startups should recruit an experienced CEO and employees with skills in financial management, marketing and sales.
Personnel
The initial founder(s) are often the technology inventors for tech-based startups. As part of forming the business, founder equity interests will be decided. In addition, a plan should be made for how/if equity will be distributed as the management team is formed and employees hired.
It may be important to have an employment agreement for every employee, including the founders, based on the venture’s products or services. Topics may include confidentiality, noncompete considerations and ownership splits. It is easier to make decisions on the front end rather than making them after a conflict arises among the founders.
As the startup grows, finding and onboarding employees is just the beginning. Learning how to plan, organize and manage human resources for the benefit of the company will be an ongoing process.
Export controls
Export control and sanctions regulations exist to protect U.S. national security, advance U.S. economic interests, and align with U.S. foreign policy objectives. These regulations limit certain information, materials, equipment, or assistance that can be provided to, or shared with, other countries, or shared with people from other countries who are in the U.S. without U.S. permanent residency or refugee/asylee status.
Activities affected by export controls include:
- Physical exports (shipments or hand-carries)
- Deemed exports (written, verbal, electronic or visual disclosures of export-controlled information to a foreign person in the U.S. or abroad)
- Engaging with people or entities from or located in countries subject to comprehensive economic sanctions
- Engaging with people or entities on U.S. restricted party lists and/or subject to targeted sanctions
Startup companies wishing to engage internationally should implement compliance measures to address:
- Interactions with foreign parties (i.e., foreign employees, foreign vendors, foreign customers, employees working remotely from outside of the U.S., etc.)
- Whether technology received or developed by the startup company is subject to U.S. export control regulations (ITAR or EAR). Please note that many activities the university engages in are exempt from export control regulations because we are a university. These same exemptions may not apply to your startup company.
- The export classification and licensing requirements for physical exports regardless of whether they are shipments or hand-carries outside of the U.S. and regardless of whether they are permanent or temporary exports.
- Other activities the startup company may engage in internationally that could be impacted by the 10 general prohibitions in the Export Administration Regulations.
- Compliance with anti-discrimination laws and statues.
Questions regarding implementing export controls and sanctions compliance for your startup company should be addressed to outside legal counsel or consultants engaged directly by the startup company.
Data security
Best practices for startups include a robust cybersecurity framework to protect sensitive and nonpublic data. If the startup receives federal funding, data security measures may be required. Learn more here:
- Basic Safeguarding of Covered Contractor Information Systems
- Controlled Unclassified Information
- Cybersecurity Maturation Model Certification
- Protecting Controlled Unclassified Information in Nonfederal Systems and Organizations
Additionally, the federal government applies a variety of IT-related requirements on a contract-by-contract basis that a startup company wishing to engage in federal research should be prepared to meet:
- Prohibition on a ByteDance Covered Application
- Prohibition on Contracting for Hardware, Software, and Services Developed or Provided by Kaspersky Lab Covered Entities
- Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment
When a startup subcontracts with the university, the company may be asked to negotiate with the sponsor so the university can conduct its portion as “fundamental research,” the results of which are published freely and are not subject to citizenship restrictions.
Questions regarding implementing data security compliance for your startup company should be addressed to outside legal counsel or consultants engaged directly by the startup company.