Startup Company Roles

Columbia University’s Statement of University Policy on Conflicts of Interest provides that, with respect to conflicts of commitment, “An officer should not accept a regular and continuing position with significant responsibilities for the management of an outside commercial enterprise or without appropriate approvals accept any other outside position that would impair the officer’s ability to fulfill his or her obligations to the University.”  (Statement of University Policy on Conflicts of Interest, Faculty Handbook 2022, Appendix III).  

The University’s Policy on Financial Conflicts of Interest and Research (“FCOI Policy”) ensures that, among other things, researchers’ financial interests and relationships with early-stage (start-up) companies that relate to their Columbia research do not bias or appear to bias their Columbia research, and otherwise protects against potential financial conflicts of interest that may arise, including in connection with early-stage companies.

Within the boundaries of these two policies, faculty members (i.e., officers of instruction) may hold an executive title, e.g., CEO or President or other title, at a start-up company if certain specific conditions are met:

  1. The relationship/position with the company must be disclosed in the faculty member’s most recent annual COI disclosure (in Rascal) and reviewed as required by the Committee on Financial Conflicts of Interest in Research (“FCOI Committee”). 
     
    • If the start-up was not disclosed in the most recent annual disclosure, an Amendment must be timely filed that discloses the start-up (in general, this disclosure should be as soon as the individual anticipates that the company will be formed).
    • The relationship and any Significant Financial Interests, as defined in the FCOI Policy, have been reviewed as required by the FCOI Committee and the faculty member has agreed to implement any required management plan.
  1. The company must be in the early stages of development:
    • 0-4 full-time employees or equivalent
    • No products on the market, being prepared for market, or undergoing clinical trials
    • No applications for external regulatory approvals (e.g. IND, IDE or international equivalent)
    • No significant funding yet (so equity in company has zero to minimal value). Phase 1  SBIR or STTR awards to the company are not considered significant funding.
  1. Other than during a leave as described in paragraph 5, the faculty member may not provide the company with any day-to-day management activity. The expectation is that the company is at such an early stage that there are no day-to-day operations to manage.  Thus, the faculty member may be involved with fundraising for the company but once the company has funding, the expectation is that it would hire a CEO who would then hire other team members to handle its operational needs. In general, once the company has developed beyond the early stage described in (2) above, the faculty member may not have responsibility for:
    • Hiring staff
    • Supervising staff
    • Financial administration or procurement for the company’s operations (payroll, purchasing of materials or equipment, etc.)

However, the faculty member may continue to hold an advisory role, such as through a Scientific Advisory Board.

Note that a full-time faculty member is not ordinarily allowed to serve as principal investigator on an award to an entity other than Columbia and must obtain appropriate prior approvals to do so. Subawards between the faculty member’s lab and the company are generally not allowed, with limited exceptions.

  1. The faculty member may not receive and does not expect to receive annual remuneration above $5,000 (the threshold for Significant Financial Interest with respect to payment for services or other payments in the FCOI Policy).  See paragraph 5 regarding special circumstances during partial or full unpaid leave from the University.
  1. Only during an approved and unpaid leave of absence for this purpose, the faculty member may manage operations at the company and/or receive compensation for an executive position that is greater than $5000. In order to obtain approval, any and all financial and other conflicts of interest must be managed in relation to the faculty member’s Columbia research and other work for the University, as documented in appropriate correspondence or written management plan.  Approval of such leaves must be in writing.
  1. The faculty member may not negotiate intellectual property agreements with Columbia on the company’s behalf, except with CTV’s written permission and in that case, only unless and until an appropriate person is hired to represent the company.
  1. The faculty member’s chair and relevant dean, director or executive vice president or their designee has been informed and has approved of the relationship between the faculty member and the company.

Upon the company receiving investment, hiring employees, etc., full-time Columbia faculty must relinquish any executive position, either by terminating the relationship or by shifting to an advisory role.  Regardless of funding, employees, etc., the faculty member may not hold an executive position for more than 12 months without further review of the status of the company and approval by the individuals in (7).