Professor putting his money behind student entrepreneurs

Mount St. Mary's teacher financing their businesses

April 18, 2002|By Mike Bowler | Mike Bowler,SUN STAFF

FREDERICK - For Derek Taylor, it's a dream course.

With 15 fellow Mount St. Mary's College students this summer, he'll start a small business financed by his professor.

If the venture fails, the professor absorbs the loss. If it succeeds, Taylor and the other student stockholders will share the profits. And he'll get three credits in the bargain.

"Where else could you take a business course spending someone else's money?" said Taylor, 23, a business major.

Plans for the course were announced here yesterday by John Laughlin, a Frederick investor and adjunct professor at Mount St. Mary's. Laughlin pledged $50,000 in venture capital for the course, which will begin May 21 at the school's Frederick campus. And he committed up to $1 million over 10 years in hopes of launching 20 businesses.

"It's the course that keeps on giving," said Laughlin, 58, a Frederick entrepreneur who has created and run dozens of companies over the past 30 years.

Under arrangements worked out with the private Emmitsburg college, Laughlin's investment will be returned if the new businesses succeed, but he will absorb the losses if they fail. Students could profit from successful ventures years after they complete the five-week accelerated course.

"We'll have a lot of fun, and I think we'll make some money, too," said Laughlin.

Numerous colleges and universities are involved in for-profit ventures, known as incubators. But Mount St. Mary's officials said they know of no other professors who are providing their own venture capital to finance start-up businesses.

The trouble with traditional courses in business planning, said Laughlin, is that they don't go beyond the hypothetical and allow students to "work for a dream."

Laughlin predicted a success rate of about 50 percent, which he said has been his experience in numerous ventures.

Most of the new businesses will be in the service sector and in the Frederick area, he said.

Students will be involved in deciding what business to start, Laughlin said, but he'll submit ideas. Not among them will be a restaurant, he said, referring to a Laughlin-financed Frederick brew pub that recently filed for Chapter 11 bankruptcy protection.

Taylor is one of four students who have signed up for the course. He said he envisions a "multicultural holiday shop" that would sell gifts and crafts all year, changing stock according to the holiday.

Business major Susan Rose, 27, said she's thinking of a consulting firm to help small businesses become more efficient.

Laughlin said all of the students' ideas will be taken into account, "but we're not likely to embark on something where ... defeat is the likely outcome, even if it is undemocratic."

Laughlin's course is open to Mount St. Mary's students and other adults who meet the college's admissions requirements. The fee for 20 hours of instruction is $765.

A lawyer who majored in English literature at Princeton University, Laughlin co-founded Information Systems Corp. in 1972 and Digital Systems Corp. in 1976. In 1981, he created Galaxy Registration, now the nation's largest processor of convention and trade show data.

He is a senior partner and chief investor in nine businesses, including a direct-mail processing company and a Broadway show touring company.

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