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Inventor Obligations in Startup Ventures
No. This extent of activity is very likely to seriously divert attention from University duties, or create other conflicts of loyalty. Individuals should consult the Faculty committee that deals with conflict of interest issues before accepting any outside management position. In FAS, this is addressed by the Committee on Professional Conduct. In some Faculties, the Dean or the Dean's representative may be designated rather than a Committee.
Yes. This is usually permissible without consultation with the conflict of interest committee. It is understood that as a member of a corporate board, the faculty member does not serve as a representative of Harvard University. Some federal agencies mandate disclosure of interests in for-profit organizations that exceed a specified threshold. For example, the NSF and NIH require disclosure of interests (including stock) valued in excess of $10,000 and/or equity that exceeds 5 percent of company stock. The FAS and HSPH Conflict of Interest Policies outline disclosure policies to help faculty comply with agencies' regulations.
Yes. This is also usually permissible without consultation with the conflict of interest committee. Again, some federal agencies mandate disclosure of consultancies for which compensation exceeds a specified threshold. Further, it should be noted that no more than 20 percent of one's total professional effort may be directed to outside work during the academic year.
Involving students and/or post-docs in Harvard work designed to benefit the company is considered a major conflict, and is generally not allowed. 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 chair of Faculty conflict of interest committee is generally required in order to ensure that the student's/post-doc's educational experience is not compromised.
Yes. Holding stock (or the promise of stock) in the startup company is allowed, but is likely to make it impossible for the company to sponsor research in the faculty member's laboratory. When an inventor holds stock in a company it is likely that he/she will be deemed to have a close financial interest in that company. Harvard recognizes those faculties often have such an interest in emerging companies and that the resulting potential for conflicts of interest requires oversight and resolution. The appropriate resolution will be tailored to each individual case. For more information on financial interests, see the University's Conflict of Interest Policy as well as any school-specific policy that may apply to you.
There are two sources of equity-based income that an investigator may receive as a part of his/her involvement in a startup venture:
- 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 start-up itself.
- Any cash proceeds resulting from equity held by Harvard on account of a technology license agreement will be shared with the inventor in accordance with the formulas specified in the IP Policy for the distribution of Net Royalties.
Yes. Faculty members and other Harvard personnel who will hold stock in the startup must report the details of their relationship with the company to their Faculty conflict of interest committee so that committee may develop an appropriate conflict management plan if that is required.