Hello John (and everyone else),
We have been running a micro-loan program at our school for several years, and the students have responded very well. Several have gone on to compete successfully in our annual business plan competition, and some have continued running their businesses after the course concludes. Details in brief include:
- We give them $100/student and allow them to form groups of up to five students
- We require that they approve their businesses with us prior to starting. (When we were setting out the program, I sent a query similar to yours to the network and heard some stories about some crazy businesses.)
- We run the program somewhat informally in the sense that we have not set up a subsidiary corporation like you mention, although I do understand the liability risk. For example, we once had a student, who wanted to start a roof/gutter cleaning business...we didn't approve that business for liability reasons.
Based on my aforementioned query to the network, I received generous feedback from several colleagues, which they said I could share. Given that we can't send attachments to the network, I have posted this feedback on my website. You can directly access the "Microbusiness Resources" link at
http://bit.ly/RwfLeS .
Good luck!
Have a great weekend.
Franz Lohrke
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Franz T. Lohrke
Brock Family Chair in Entrepreneurship
Chair, Department of Entrepreneurship, Management & Marketing
Brock School of Business
Samford University
800 Lakeshore Drive
Birmingham, AL 35229
Office: (205) 726-2373
Fax: (205) 726-2464
Skype: franz.lohrke
Secretary, Academy of Management Entrepreneurship Division
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-----Original Message-----
From: Entrepreneurship Division Listserv [
mailto:ENTREP@AOMLISTS.PACE.EDU] On Behalf Of John Bunch
Sent: Friday, November 02, 2012 9:59 AM
To:
ENTREP@AOMLISTS.PACE.EDU Subject: Micro-loans to finance student run business on campus... Advice and experiences?
Greetings to everyone!
I have a question for you all. Our Entrepreneurship Center is in the process of creating a micro-loan program to fund student run businesses which would primarily be on campus but not limited to on campus customers.
There is even some talk about taking an "equity stake" in ventures that have growth potential.
The administration wants to actually set up a subsidiary corporation to run the loans and equity through to shield the College from liability risk. Is this a good (effective) idea? Is the cost of creating such an entity worth the benefit? Are there other ways of managing these kinds of projects?
Our administration has raised concerns about liability that these ventures might create for the college. So.. I would like to hear from colleagues who have some experience with promoting student run businesses either through on campus incubators or micro-loan programs. Specifically, any recommendations about the oversight of these programs would be appreciated as well as input about the liability issue.
Thanks in Advance!
John Bunch
Benedictine College
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Ventures HO!