Starting a company in grad school?

[preantepenultimate]

I'm starting grad school this fall, but I'm thinking of forming a small business around some products/ideas for some supplementary income. Coming from an engineering background, I'm looking at an LLC since that seems to be the least hassle. I'm mainly interested in commercializing some apps/software I've developed, but I might do small runs of physical goods as well (electronic devices of my own design).

Does anyone have any tips or advice for doing this sort of thing while simultaneously working on grad school? I know that time is going to be a huge issue, but otherwise I'm mainly concerned about things like intellectual property laws (will my university try to claim ownership of things I develop in my time as a student?) and residency issues (starting a company in a state where I'm not currently a resident).

[TakeruK]

I don't know anything about the state issues, but for the University side of things, you need to be careful how you work on this. 

When I started my program, we all had to sign agreements regarding conflict of commitment and intellectual property. The conflict of commitment thing basically says that we cannot be in a "line position" (i.e. CEO, CFO, CTO, etc.) If you are in this position while a grad student, you have to give this role to someone else while in grad school or take a leave of absence. Some students take the leave of absence to bring their company to a point where they can hand off day to day management to another person or maybe during this time they decide they don't want to return to grad school. You can get up to 2 years off this way, so it's also a nice way to try out your startup and see if it's going to be viable. Of course, whether you get your leave and/or you get to return exactly where you left off also depends on your advisor.

As for intellectual property, at my school, the only way you can ensure you have full rights to your work is to not touch it at all using any school resources. Don't use your school computer to write any emails, run any code, create any websites. Don't use your school email address for any communication. Don't use school labs, school equipment, don't do work on your own laptop while on the school WiFi etc. Don't use your school's library subscription to download/access articles. Don't use free software provided by the school to do your work. I would be careful to log everything I do for my own company and be able to prove that you didn't use any school resources to do this. Note that all of this is only if you want there to be no connection between you and the school with the company's IP. I think my school actually has some programs that help startups get going. I don't know the conditions of these types of partnerships/agreements, but once you start at your school, you can review the school's policies and decide if it's agreeable to you.