UNIVERSITY PARK, Pa. – Beginning this fall, Penn State Law will offer a new Entrepreneurship Program complete with coursework and experiential learning designed to provide law students with the knowledge, skills, and experience necessary to provide legal assistance to entrepreneurs at every stage of the entrepreneurial process.
Led by Penn State Law professor Tom Sharbaugh, the Entrepreneurship Program will enhance the academic experience of Penn State Law students and expand their career opportunities while providing pro bono legal services to Penn State entrepreneurs in the commercialization of their ideas.
“Whether in science, business, technology, or medicine, Penn State students and researchers are creating game-changing new ideas, inventions, and innovations every day,” says Penn State Law interim dean James W. Houck. “This new program will provide Penn State Law students with the opportunity to build high-demand skills in this age of startups, while they help these Penn State entrepreneurs move their ideas out of the laboratory and into the market.”
At the heart of the new Entrepreneurship Program is a course starting this fall that will expose students to a broad range of legal issues that typically arise in the course of representing an entrepreneurial venture. Representing the Entrepreneur, designed and taught by Sharbaugh, will cover topics including early-owner agreements, governance, succession, equity and debt finance, employment contracts, executive compensation, risk management, and ethical issues, among other areas critical to early-stage ventures. The course will also review customary financial statements, business strategies in terms of long-term development or early exit, and common exit alternatives.
“The course is designed to provide solid foundational knowledge to students who want to pursue a career representing startups and investors in early-stage companies,” says Sharbaugh, a business lawyer who focuses on raising capital for early-stage businesses. “Students will be exposed to the diverse legal problems that they are likely to encounter in an entrepreneurial setting, either as lawyers for the enterprise or as owners of an equity position in the enterprise.”
The course is a prerequisite to another component of the Entrepreneurship Program, Penn State Law’s new Entrepreneur Assistance Clinic, which will launch in spring 2016. Under Sharbaugh’s direction, students in the clinic will represent entrepreneurs, startups, and nonprofit organizations in a setting similar to a small law firm.
Clinic students will learn the basic skills necessary to attract and interview potential clients, organize a business plan, communicate orally and in writing with clients and third parties, conduct research, draft transactional documents, and prepare for, and manage, closings. Designed to help Penn State entrepreneurs first and foremost, the clinic will provide legal assistance in choice of entity, entity formation, founder and initial investor agreements, shareholder agreements, loan arrangements, intellectual property protection, commercial real estate leasing and acquisition, operating agreements, employee management, and compliance with regulatory requirements.
“Penn State is ripe with innovation, and there is an unmet demand for the kind of specialized legal services that the clinic will offer, so I don’t expect us to have a shortage of clients,” Sharbaugh says. “In fact, many entrepreneurs are moving their ventures forward without any legal advice or are relying on online forms that they download without any professional guidance. So I expect the clinic to be a major boon to the Penn State entrepreneur community and the University as a whole.”
Penn State consistently ranks in the top 20 of U.S. universities for research productivity, regularly topping $800 million in annual research expenditures. In fiscal year 2014, the University received $501 million in research funds from the federal government. Penn State is also abuzz with entrepreneurial activity, with undergraduate, graduate, and research programs all contributing the University’s culture of entrepreneurship.
In a recent op-ed, Penn State President Eric Barron writes that “this success has translated into job creation and a reputation that helps students land competitive jobs … but in today’s competitive economic climate, we must do more than just keep the doors open to innovation.”
This need to do more has spurred Barron to launch Invent Penn State, a $30-million economic development campaign aimed at turning ideas and innovations originating at Penn State into viable business ventures. Providing legal advice for entrepreneurs is a key component of the campaign and any effort to transform inventions, discoveries, and new technology into commercially successful businesses.
“We’re looking forward to playing a key role in this University-wide initiative to harness the collective talents of Penn State’s students, faculty, and researchers to turn their innovations into jobs and economic growth,” Sharbaugh says. “All the while, we’ll be preparing our students for success in an area of law that is likely to only grow in demand in the future.”
Sharbaugh has been a business lawyer and partner for over 26 years in the Philadelphia office of one of the world’s largest law firms. Until recently, he served as the firm-wide managing partner of operations at his firm, a post that he held for over 14 years. In the past year, Sharbaugh has been a frequent writer and speaker on legal issues related to investments in early stage companies. He received his undergraduate degree in Economics from Penn State’s Smeal College of Business, with highest distinction, and his law degree from the University of Michigan Law School, magna cum laude.
For more information on the Penn State Law Entrepreneur Assistance Clinic, visit pennstatelaw.psu.edu/entrepreneur-assistance-clinic.