The History of the Center for Venture Research
Insight provided by Amanda Lee, originally published on December 29, 2019
Since the 1980s, the Center for Venture Research (CVR) has been conducting research focused on how high-growth companies source early stage financing, typically from angel investors. The Center provides entrepreneurs, as well as investors and public policy individuals at the state or federal level, a wealth of information about the angel investment market. Though the Center’s primary objective has been research, such an entrepreneurial focus has helped the University of New Hampshire adopt other initiatives focused on the startup sector, including the Rines Angel Fund and Entrepreneurship Studies major.
Origins of “Angel Investor”
In 1978 UNH professor Bill Wetzel coined the term “angel investor”. Throughout his research, he noticed that young companies were receiving funding but did not know where it came from. Discovering the money was from individual investors, he then coined the term that has since become a popular phrase among industry vernacular. Soon after, Wetzel founded the Center for Venture Research with the help of his colleague John Freear.
The Process of Funding Venture Research
In terms of funding, when an agency like the CVR is looking to research a specific topic, such as angel investing, they will put out a Request for Proposal (RFP). Then they submit a proposal and a faculty member, typically from UNH, needs to agree to help work on the project. If chosen, the CVR goes through UNH to deal with contracts, set a budget, and set a deadline. The budgets are very specific on what funding is allowed to be used for. The grant is utilized for multiple purposes, such as to pay the salary for the Center for Venture Research Coordinator, to pay for faculty members to pursue research in lieu of teaching, or to fund travel to present research to national and international contacts. The grants can also be used to create a report or have access to data, such as data from PitchBook. The funding gives the CVR the flexibility to do things people would typically have to rely on funding from the school to do.
There have been almost 30 grants received since the start of the CVR. These grants have been from private or public agencies or companies, including governmental agencies. Due to the CVR’s reputation in the angel investment field, many grants have been sourced directly through Jeffrey Sohl, a UNH professor and the current Director of the CVR. Sohl became involved with the CVR in the 1980s and took over as Director in the early 1990s. Agencies have told Sohl when they have had open RFPs requesting research in the angel market that might pique the CVR’s interest. The CVR has received grants from governmental agencies including the US Department of Treasury, the National Institute of Standards and Technology, the US Environmental Protection Agency, and the US Small Business Administration. Public companies such as Lotus Development Corporation and Ernst & Young have also supplied grants.
Current Progress
The CVR’s focus has been mainly on angel investor, venture capital, and equity research. However, as students work with the CVR to conduct research for thesis projects, this focus may shift. The CVR typically tries to work on three to four research projects at a time, which has allowed the Center to support research on a variety of topics. A few of Sohl’s favorite projects include research on the personal and professional position of women angel investors, where angel investors fit into the private equity market, and how crowdfunding might affect the angel investing market.
While there are journals that offer academic research from some other universities on angel investment, venture capital, and startups — such as the journal of Entrepreneurship Theory and Practice and the journal of Entrepreneurship and Regional Development — The CVR is unique in that it has been researching these topics for over 30 years. It also has been systematically collecting angel data annually for almost 20 years, which allows the CVR to report on trends in the angel market. The type of information and level of detail required affects how easy it is to collect data on startups. However, the CVR has resources, such as PitchBook, to help fill in certain data points.
The Future of the CVR
In terms of the future for the CVR, Sohl would like to see the research expand into different topic areas. Currently, research has been done on the attitudes, behaviors, and characteristics of angel investors. However, there are many other areas to explore, such as applying research on female angels to minorities. The goal is that the CVR will continue to expand and provide informative data that can address these under-researched areas of venture research.
Amanda Lee is a senior from Bedford, New Hampshire. She is pursuing a major in Business Administration with an option in Accounting and a minor in International Affairs. She along with a couple of the Fund’s alumni have previously competed and placed in a variety of competitions including the Undergraduate Research Conference and WERC Environmental Design Competition. She has spent the last year studying in Paris and Sydney and interned this summer for Ernst & Young in their Boston, MA and Berlin, Germany offices.
