Back in the nineties, before hosted servers were readily available, some Internet companies like Yahoo and Google got started in universities, using the institution's servers and Internet bandwidth, moving out when they went commercial. That would seem to need a pretty big jump, going from zero income to enough to pay e.g. five grand a month for a T1 line in one shot, which would seem to create a strong need to find venture capital.

Suppose the founders of such a startup, in a university in the nineties, wanted to bootstrap, so they made a suggestion to their host institution: we want to experiment with going commercial, finding ways to monetize our startup, with small amounts of income at first. We can't reasonably use your facilities for free once we go commercial, so can we pay you for continued hosting, some amount that should be a lot cheaper than getting a T1.

Would such an offer be accepted? Is there anything I'm missing?

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    "We can't reasonably use your facilities for free once we go commercial" - these days, universities very much do provide certain facilities for free to startups founded by their former students and staff for a certain amount of time. It's part of what is known as technology transfer and is meant to avoid/soften exactly the "pretty big jump" you mention. – O. R. Mapper Jan 18 '17 at 16:36
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    I would think this would be highly dependent on the institution – Jonathan Landrum Jan 18 '17 at 16:36
  • @O.R.Mapper Ah, that makes sense! Did that aspect of technology transfer exist in the mid-nineties? (The startup I have in mind, and its founders, are fictional, but I'm trying to keep it realistic.) – rwallace Jan 18 '17 at 16:41
  • @rwallace: No idea, that was before I had any insight into academia. – O. R. Mapper Jan 18 '17 at 16:49
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    It sounds like you are trying to get some historical information to make a piece of fictional writing sound more believable. If so, this Meta question at History SE might help you: meta.history.stackexchange.com/questions/3340/… // At any rate, my hunch is that back then, things were more informal than they are now, and that use of a university server would have been permitted. But you should take that comment as a wild guess, really. – aparente001 Jan 22 '17 at 14:08

Within the United States, universities help startups in many different ways. This includes "internal" startups that are created by students and faculty as well as "external" startups that are created by university outsiders but receive support from a University.

  • Google initially had an "exclusive licensing partnership" with Stanford. As noted in a Wall Street Journal Article, this deal paid off well for Stanford.
  • Academic researchers and students can be encouraged to do technology transfers and "commercialization" of research. This can be within the University or outside of the University. For example the Wisconsin Alumni Research Foundation got started because the University did not want to help support a professor's efforts to sell his research. As another example, Texas Tech has an Office of Research Commercialization to help within the university.
  • Universities can also have incubators such as Univeristy Research Park in Madison, WI. Incubators such as these can help startups overcome the hurdles you mention.
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