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Are faculty permitted to invest in start-up companies of current Stanford University students?

All faculty should consider carefully whether investing in any current student or postdoctoral fellow’s company is in the best educational interest of the student or fellow, whether or not the faculty member has any involvement with the student’s academic program. However, a higher standard applies when a faculty member has direct involvement in a student or postdoctoral fellow’s academic program, including as the academic advisor, an honors/PhD thesis advisor, or a classroom teacher in the student’s major. In these circumstances, a faculty member who wishes to invest in a current student or postdoctoral fellow’s start-up company must receive approvals from the Dean of the student or postdoctoral fellow’s school, the Dean of the faculty member’s school and the Vice Provost and Dean of Research. The strong presumption is that such involvement would constitute a significant conflict of interest that could not be mitigated or managed and that it would therefore not be permitted. Academic staff, other teaching staff, and those who directly interact with students and postdoctoral fellows in the role of instructor or advisor should also follow these procedures.  Please review the entire memo dated 9/18/2013, Faculty Investment in Stanford Student Companies.