A student-run venture fund located at the University of Akron now has $250,000 to invest in start-up businesses and plans to add chapters from other universities.
The Northeast Ohio Student Venture Fund has received a $125,000 grant from the Burton D. Morgan Foundation in Hudson. That provided the necessary match for the fund to receive a $125,000 grant from the Ohio Third Frontier Commission.
Deborah Hoover, president of the foundation, which focuses on entrepreneurship and entrepreneurship education, said its trustees were impressed with the proposal from the regional venture fund.
“It is a really interesting concept,” she said. “It is for students who want to learn the due diligence process on how to research and approve an investment in a company.”
The foundation provided more than the requested grant of $75,000, said John Myers, vice president of the venture fund and executive-in-residence of the University of Akron Research Foundation.
“Our primary goal is to give students the opportunity to act like investors with real companies and real money,” he said. “Students make the decisions.”
The venture program was under discussion for several years before getting underway in 2010, he said. Graduate students in UA’s chapter investigate proposals from start-up companies. A board, which includes students, entrepreneurs and investors, decides whether to invest $25,000 in seed funding.
“At an early-stage business $25,000 makes a difference,” he said.
The fund has invested in two companies and approval is pending for a third, Myers said. The companies do not have to be student-run.
Initial funding for the first two investments came from donations and the Akron Research Foundation. The new grant money will be used for the third investment, since funds had been depleted, Myers said.
The program allows college students to see entrepreneurship as a career opportunity, he said.
New student chapters will be added to the regional group. Myers said he is in negotiations with Kent State University, is discussing the program with Baldwin Wallace University and will begin discussions with Lake Erie College and Hiram College.
“Until we got the match we were not very comfortable recruiting other colleges,” he said. “They can create their own chapters and get access to the funds.”
Each college that joins the fund will have a member on the board and be encouraged to raise funds, he said.
He expects the $250,000 to last two years and the fund will seek additional Third Frontier funding, he said.