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FAQs

Inventor Obligations in Start-Up Ventures

Can I hold a line management position in the company?

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.

Can I sit on the Board of Directors or Scientific Advisory Board of the company?

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.

Can I consult for a company?

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.

How may my students be involved in company work?

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.

Am I able to receive equity?

Yes.  Holding stock (or the promise of stock) in the start-up 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 a definition of Close Financial Interest, see the Conflict of Interest Policy.

How does equity get distributed?

There are two sources of equity that an investigator may receive as a part of his/her involvement in a start-up 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.
• The investigator may benefit from stock in a company that Harvard receives as part of its compensation for the license granted to the company.  Harvard manages this stock according to current policies found in the Equity Policy and elsewhere.

Am I required to report my equity holdings to Harvard?

Yes. Faculty members and other Harvard personnel who will hold stock in the start-up 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.