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Models for Capital Creation in Technology-Mediated Learning. Standard Model. Capitalization Entity. Institution. Ownership Interest. Non-profit or Public Entity. For-Profit Entity. Fundamental Premises. Academic control remains with the Institution.
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Standard Model Capitalization Entity Institution Ownership Interest Non-profit or Public Entity For-Profit Entity
Fundamental Premises • Academic control remains with the Institution. • The capitalization entity cannot exercise control over the Institution. • The structure does not affect either accreditation or state authorization.
Rights of the Capitalizaation Entity • The Institution’s intellectual property rules do not necessarily apply to the capitalization entity. • The capitalization entity can engage in non-credit, non-degree instructional services. • The capitalization entity can engage in the creation of credit and non-credit courseware.
Economic Benefits to the Institution • Income stream from credit enrollments. • Royalty stream from use of brand (i.e. institution’s name and logo). • License revenue from use of courseware. • Share of net profits of capitalization entity. • Share in equity appreciation in capitalization entity.
The Bifurcation Model Institution
The Bifurcation Model For-Profit Operating Subsidiary All Non- Academic Functions Institution Creates All Academic Functions
The Bifurcation Model For-Profit Operating Subsidiary Non-Academic Functions Institution Minority Owner Majority Owner Investor Academic Functions
The Operating Subsidiary Model Institution
The Operating Subsidiary Model Institution Creates Special Purpose For-Profit Entity $
The Joint Venture Model For-Profit Partner Institution
The Joint Venture Model For-Profit Partner Institution Ownership Interest Ownership Interest New For-Profit Venture
The Common Enterprise Model Institution A Institution B
The Common Enterprise Model Institution A Institution B Shared Governance Shared Governance New Non-Profit Entity
The Common Enterprise Model Institution A Institution B Shared Governance Shared Governance New Non-Profit Entity Ownership $ New For-Profit Entity
Services Model #1 For Profit Entity Builds Facility
Services Model #1 For Profit Entity Institution Builds Creates Facility or Delivery System Curriculum
Services Model #1 For Profit Entity Institution Builds Creates Facilityor Delivery System Delivers at Curriculum
Services Model #2 For Profit Entity Creates “Turnkey” Curriculum
Services Model #2 For Profit Entity Creates “Turnkey” Curriculum Institution Adopted by
Services Model #2 For Profit Entity Creates “Turnkey” Curriculum Adopted by Institution Delivered Via Delivery System
Services Model #2 For Profit Entity Creates Institution “Turnkey” Curriculum Adopted by Evauates Student Performance Delivered Via Awards Academic Credit or Credential Delivery System
Michael B. Goldstein Dow, Lohnes & Albertson 1200 New Hampshire Ave., NW Washington, DC 20036 mgoldstein@dlalaw.com 202.776.2569 Fax 202.776.4569 www.dlalaw.com