October 8, 2008
Posted by Ryan Graves
Stanford owns Google, pass it on
Well, not exactly. But did you know that…
Students create interesting idea using university resources. Students create a company and have an exclusive license to use the technology, which they made at their institution. Institution gets bragging rights and extra revenue for the school. For an entrepreneur to promise a large amount of ROI to their university, without even knowing what to promise, I’m not surprised that Marc Andreesen went west. –from Chicago Tech Report
I have two thoughts on this.
1) Why don’t more schools have this structure set up for companies that are started at the university?
This credibility that Standford gets, especially with a company like Google is huge. Other schools with awesome technology programs like University of Illinois and also University of Wisconsin (Madison) should definitely be taking advantage of this opportunity. A few weeks back Eric Olson wrote about the Midwest brain drain. This is a great opportunity to combat that problem. Here’s what you do, stop the drain even before it becomes a leak, it’s as simple as providing a better opportunity and a better chance for success! That’s the question all ‘smart’ entrepreneurs are asking themselves, what position do I have to put my company in to have a better shot at success? The best position for web startups is still either Silicon Valley or NYC but that could change with the increasing number of VC’s in the midwest and hopefully an increase in investment from universities.
2) Would this structure be a deterrent for entrepreneurs at a university program?
The argument here would be, why would I want to give the university a guaranteed piece of the pie? I’ll tell you why, this model is proven. It’s the same decision a company has to make when taking VC money. We give you a portion of our equity and you give us resources. Sometimes those resources come in the form of cash, sometimes in the form of coaching or advice from a board member. Either way, the return that a company gets from taking VC money and having the opportunity to grow, or taking university resources and having the opportunity to start is usually well worth it.
So, Stanford owns Google. Who does Harvard, U of I, UC Berkley, UW Madison, MIT, Carnegie Mellon, or CalTech own?
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