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Student Start-Up Business Center (SSBC) is the center to promote entrepreneurship through engaging university students in entrepreneurial activities. The SSBC will be run by the university with initial funding by UST Bannu, HEC, and the Promotion of Education in Pakistan (PEP) Foundation Inc. New York each Rs.2 million. It will provide funds and technical and scientific base to student’s start-ups and will promote entrepreneurial activities through awareness and networking activities. Ultimately, the SSBC will provide laboratory to university students to hone their entrepreneurial skills, gain practical experience, exploit the university scientific base for commercial purposes, link the university to the local industry, and to grow sensitivity among the students to start their own businesses apart from looking for corporate/government positions.



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REGISTRATION FORM  FOR  START-UP  COMPETITION - 2017 

 

The goals and objectives the SSBC programs are as under:

  i.        Enhancing Awareness about entrepreneurship (through seminars, talks, innovation challenges and so forth).

  ii.        Enhancing Skills (through training for students in basic skills such as business plan development, developing elevator pitches, and practically participating in business development process).

 iii.        Promoting Venture Capitalism (by establishing a long term venture fund that will raise funds from donors and investors, provide deserving students’ startups with business mentoring and initial financial resources).

iv.        Extend Linkages (provide links to start-ups with relevant industries and critical business support services. Moreover, the center will work as a platform for local entrepreneurs, government employees, academicians, and students).

v.        Changing the Eco-System (to enhance sophistication of the local businesses by creating venture capital-backed business champions as well as by providing rich business consultancy to local businesses).

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There will be a Director, Staff to the Director, Management Committee, and the Board of Trustees. See the below organogram of the SSBC.

 

1.    The Executive Director

The University will appoint one person as the Director of SSBC. The Executive Director shall:

a)        Operate from Vice Chancellor’s office.

b)        Manage every aspect of the SSBC, including planning, organizing and managing the student start‐up competitions, and fund raising programs.

c)        Look after operations of the portfolio businesses by acting as general partner of the UST Venture Fund.

d)        Shall put every effort to ensure growth and stability of the investee firm through his/her advice to its management.

e)        Formally sign contract with the investee firms after the management committee selects the firm for investment.

f)         Make sure to fulfill all formalities in the funding processes as well as post-investment activities.

g)        To participate in the decisions of the port-folio business if he/she deems that its management lacks ability and that such participation is not in contradiction to the contract with the respective investee firm.

h)       Make sure that contracts signed with investee firms are enforced and to report instances of non-compliance to the Vice Chancellor/Management Committee.

i)         Make sure to report to the Vice Chancellor any adverse selection, moral hazard or any other opportunistic behavior on the part of the management of the investee firm, and

j)          To serve as chairman of the Management Committee and the non-voting secretary of the Board of Trustees.

2.     Management Committee

The Committee will be comprised of at least five persons, one of them, the Chairperson, will be the Vice Chancellor.

a)          It will be responsible for overseeing all aspects of managing and operating the Center.

b)          Review application forms and select the best proposals for investment.

c)          Advise the Director, where needed to apply for grants to different donor organizations and businesses to secure donations and investments, seek pro‐bono services for legal counsel to students, and other services as necessary.

d)          It will make strategic plan to promote and expand the UVF that will include the fundraising tools.

e)          Make sure that UVF is a sustainable fund that will make investments in students led start-ups.

f)           Make sure that any “adverse selection” is avoided in the selection process of the investee firms for investment.

g)          Make sure that opportunistic behavior is restrained through efficient contracts with the investee firms by the Director.

h)         Make sure that detailed SOPs for evaluation and selection of proposals, reporting, monitoring and other systems are in place.

i)           Make sure that such clauses are included in the contracts that eliminate any conflicts of interests and agency problems.

3.    Board of Trustees

The Board of Trustees shall:

a)        Meet annually for its Annual General Meeting of the SSBC.

b)        Approve the budget of the SSBC and discuss the annual audited report in its annual general meeting.

c)        Approve or suggest amendments in the strategic plan of the SSBC.

d)        Make or amend rules and regulations of the SSBC under the framework provided by the Memorandum of the SSBC.

e)        Recommend changes in the Memorandum of the SSBC to the University Syndicate.

f)         Make sure that the actions of the management committee and the Director are according the memorandum, rules, and regulations of the SSBC.

g)        Suggest to the director and the management committee to take steps the Board deems are beneficial to the growth and sustainability of the SSBC. 

h)       Order special audit of the expenditures incurred or inspection of the investments made.

By function, the SSBC can be divided into four different functional areas: Entrepreneurial Society, Consultancy, Fund Management, and Other Support Initiatives. 

i.              University Business Consultancy:

This will provide consultancy to the portfolio businesses as essential service. The consultancy will include both management consultancy (such as marketing, accounting, HR, financial management and strategies) and technological consultancy to use the knowledge and scientific/technological base of the University for the New Start-ups. Prominent professors from across the university will be part of the consultancy. The consultancy will not be limited to the portfolio businesses though, and will provide consultancy to the local industry and young entrepreneurs charging reasonable fee. The idea is to promote the entrepreneurship in the region, to link the university with the local business problems and to ultimately shift the focus of the university research and students internship programs to the local industry and community.

ii.            Entrepreneurial Society:

SSBC will establish an entrepreneurial society having its own by-laws to be devised by the management committee. It will be part of the awareness program and can generate revenues from donations and membership fee to offset expenses on the awareness of the entrepreneurship. It can have several kinds of membership i.e. for students, faculty, and entrepreneurs and members will be charged annual fee. Members can participate in seminars, conferences, workshops, and other networking opportunities. 

iii.           Other Entrepreneurship Support activities:

Under this program, the Center will launch activities to promote entrepreneurship in the academic and business circles, both students and local business actors through workshops, seminars, conferences, elevator pitches, as well as providing training to the young entrepreneurs. Under this program the Center will also make sure to launch other networking activities between local entrepreneurs, students, academicians, researchers, investors and government officials.

iv.              Fund Management:

The SSBC’s fund management, to be called University Venture Fund (UVF) will be based on venture capital model. Venture capital is a concept very well established in the developed world and some of the developing countries such as China and India and is a successful vehicle to support entrepreneurship and innovation. Recently, universities in the US have started their own Venture funds. Most prominent of them are New York University (Innovation Venture Fund, 2010), University of California, Las Angeles, (UCLA VC Fund), University of Utah (University Venture Fund, 2000). The SSBC’s Venture Fund will finance students start-ups with high growth potential and innovative ideas on equity basis for three to five years and eventually will exit from those investments through market mechanisms while switching the enhanced funds to further students’ start-ups.

1.    The SSBC will provide technical support through University Consultancy during its investment or till the port-folio firm’s management is skilled enough to run the business independently.

2.    The SSBC will make sure to stabilize and grow the portfolio business to earn profits from regular income of the portfolio business and later from its sale to either a third party or to the current management on market rate.

3.    The exit from portfolio businesses will be allowed through any mode including IPO, trade sales, and management buy-ins/outs.

4.    The SSBC will attract investment from institutions and individuals to invest in the UVF or to make syndicated investment with other institutions in the portfolio businesses. In the latter case, the SSBC will be a general partner and the other investors as silent partners or in other words the silent partners will not participate in the monitoring and decision making with regard to that business.

5.    Investors in the UVF will receive share of profit from the UVF and any syndicated investor (or silent partners) will receive profits from portfolio firm’s regular income and exits according to the agreed terms and conditions of the respective portfolio business.

6.    SSBC will get 20% of the total profits after preferred returns at the rate of 13% from portfolio businesses aside from its relative share in the residual profits based on share of investments made. These funds will be put to the General Fund of the SSBC and will be spent on operating expenses as well as upside incentives to the management of the SSBC.d Lerner, 1999).

7.    SSBC will also get management fee of 2.5% of the total funds under management and will be allocated to SSBC General Head.

8.    Rates can be reviewed by the Board.

9.    Initially, UST Bannu will provide salaries to the staff of the SSBC as well as funds to the General Fund to cover operating expenses of the SSBC. However, gradually, the SSBC should generate profits from management fee and carried returns subsequently to cover all operating expenses (including upside incentives but excluding salaries) from own profits and not from university funds.

10.    The SSBC funds allocated to the UVF will not be used for any purpose other than seed funding and management fee under any circumstances.

11.    The revenue that goes to the UVF shall not be used for operating expenses, and salaries under any circumstances. See the conceptual mapping of how SSBC investments and returns will work in Figure 2 and Figure 4.

12.    Operating expenses will include funds spent by SSBC on expenses such as salaries, upside incentives to the management of the SSBC, workshops, conferences, networking, consultancy fee, publications or such other expenses for promotion of the SSBC. 

13.    The life of the VC will be eight years.

The University will set up a separate bank account for the StartUp Business Center (SSBC). All donations and funds for the purposes of SSBC will be deposited in this account. The funds will be used only for the purposes of awarding financial aid in the form of seed money for deserving student startup businesses. An annual audit report will be produced every financial year and made available to the public at the University website to ensure transparency and accountability of managing SSBC. The report will include the date, source and amount of donation and the date, the name, and degree of each recipient student, as well as updated details on the status of SSBC account. These steps will reassure and encourage past donors as well as new donors that SSBC account is managed efficiently and all the distributable part of the funds go towards the programs as required by the mission and donor restrictions.