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I wanted to follow up about the rest of the story for this original post:

We have a faculty member (let's call him "Jim") who has owned a small gourmet food catering business for years. We started a student social entrepreneurship club and Jim is the faculty advisor. To get them started, he shared the recipe for one of his products, and helped the students learn how to create a retail business from manufacturing to ultimate sales. The money they make goes to an organization that builds clean water wells in a developing nation. It has been a huge hit, and students are working directly with manufacturing companies, packaging and marketing firms, and retail outlets. Jim is retaining the patent on his recipe.
My institution is having a really hard time with this student venture for two reasons: 1) they think Jim has a conflict of interest and 2) they don't see how the student business venture can benefit the institution. Do you have, or know of, a revenue sharing agreement document or some process by which faculty, students, and the institution can share in a revenue stream? Do you know how other institutions have dealt with conflicts of interest? We need some models of what is already out there. None of our administrators are business people, this is a new venture for the institution, and they are having a hard time envisioning how this can work to everyone's benefit.

I heard from a bunch of you on the list-thank you very much-wanting to know what we eventually did.

We ended up going two different routes. Our faculty member, Paul, owns Doc E's BBQ and salsa, and it was a set of salsa recipes he offered to the student group to sell. Our admin folks could not find a way to make this work within our risk management model, so Paul and the student leader Jack spun it out as a LLC on its own, called Doc E's Life Changing Salsa. While it's not a B-Corp, they set it up where most of the profits from the company go to fund their clean water initiative in India (https://watertothrive.org/). A very successful holiday sales season funded its first clean water well. They found venture funding from members of an advisory board to the Economics & Management department, and they have paid everyone back according to the loan terms. The company is growing, and its products are available locally as well as on Amazon (https://www.amazon.com/Doc-Es-Life-Changing-Salsa/dp/B017KKLNX0/ref=sr_1_1_a_it?ie=UTF8&qid=1464792859&sr=8-1&keywords=Life+changing+salsa) . Jack has graduated, but maintains an ownership and leadership position in the company in a part-time role. My institution does not receive any part of a revenue stream.

The student social entrepreneurship club will sell another product not associated with Paul's own company; Paul remains the faculty advisor. The club held elections at the end of the year and have been brainstorming new products and services as potential funding mechanisms for the club. I am not sure what they will eventually sell, but it cannot be associated with one of Paul's ongoing ventures. The new leaders decided the club will also fund clean water initiatives although not only in India.

I think there were a lot of moving parts here that complicated matters. First, our VP who was in charge of trying to negotiate a deal with Paul/Jack was retiring and I think he did not want to start a new type of venture that the next person would be uncomfortable with. Second, there were concerns about taking advantage of students to sell one's own products and I understand those. As I think about that more, the dynamics between Paul and Jack left me confident that Jack would not be exploited as they had a real partnership relationship and had a very detailed partnership agreement. Jack, though, was a very unique student-supremely confident with lots of leadership experience and he would have no trouble pushing back on anything he felt uncomfortable with. Would other students feel so empowered? I am not sure, so that would be something to consider if anything like this were to come along again.

And last, we are nearing the end of a strategic planning effort led by the President where new business models are a strategic priority, however, that was not the case a year ago. The timing of introducing a potentially mutually-beneficial venture was too early in that process.   

Jack says running the salsa business was the single most effective learning process he has had in his four years here. He and his student team were amazing, and how I wish it had worked out to share the venture's success with the institution. I have billable hours into talking with Jack and the other students who were frustrated over the repeated wall of "No" but from a learning perspective, I don't think I could ask for anything more as they had to engage persistence, creativity, and keeping their eye on the ball. The insights from you all helped them try different avenues with the administration, and ultimately helped them understand when to stop, and go a different route.

Krist Schell from NKU said: "I have had success in finding support for student groups by drawing upon community endorsements. Hard to get folks to hear music when the pitches are too high for them to hear, so get other musicians to play the same tune, just a different arrangement." So I remain hopeful that these successes will seed others who can hear it differently. Thanks so much to everyone on the list who sent suggestions and weighed in!

Kathy

--    Kathy Lund Dean, Ph.D. Board of Trustees Distinguished Professor of Leadership & Ethics Gustavus Adolphus College 800 West College Avenue Saint Peter, MN    56082 507-933-7407 (office)  Skype: kathy.lund.dean Web: https://gustavus.edu/profiles/lunddean  Co- Editor, Journal of Management Education http://jme.sagepub.com/   My TEDx Talk on YouTube https://www.youtube.com/watch?v=7365IO9l-tw