My College is Asking for Startup Equity

Nearly a week or so ago I got a text from a friend which went something along the lines of ‘Bro need a quick help. Do you know if your college demands some sort of compensation or equity for startups done by its students?’

The short answer to it was no and which was my immediate reply. But after a deeper thought I realised that I hadn’t seen this question arise before. All my interactions with startup founders/teams with the constraint of them being called student entrepreneurs all followed few predictable patterns.

The first was when the team consisted of fresh graduates or had worked for a few years before starting up and the common binding thread was their former institution, which no longer influenced them. The second scenario was of the team building the product studied in one of the less startup savvy colleges. The students were on their own, expecting no assistantship from their institution.

Somewhere in the middle fell the third scenario of institutions with a broader outlook. They went out their way to encourage their students to build something by providing access to grants, low interest loans and helped them draw from the institution brand and resources to propel the startup forward.

But the question by my friend seemed different. Here was an institution which had a credit class on ‘entrepreneurship’ during which the student built a product and the institution wanted to have a part of the product in the form of equity. Which the student(s) felt was wrong. On my part there could definitely be a blindspot in understanding of the entire issue and what was agreed upon by the student and institution before the class began.

Still, the issue is complex especially owing to the influence academic institutions hold over the career of a student in the country along with the rising prominence of startups. Can we see a rise in similar issues in the near future? Or should we think of this as solitary misunderstanding.

[Contributed by Gurpreet Bedi. Part interaction designer, part writer. Gurpreet Bedi’s work revolves around the fusion of design + technology + startups with some of the most interesting platforms in the domain.]

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