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Sustainable venture capital - Catalyst for sustainable start-up success?

Bocken, N. M.P. LU (2015) In Journal of Cleaner Production 108. p.647-658
Abstract

To address global sustainability challenges, major investments are required in sustainable businesses that deliver triple bottom line results. Although interest in sustainable businesses is on the rise, these businesses are not yet widespread. Venture capital investment has a key role to play in the development of sustainable start-ups. The research area of 'sustainable' venture capital is still emerging. More research is required to understand how venture capital can support the development of sustainable businesses. This paper provides insight into how venture capitalists can contribute to sustainable business success, by investigating their role, motivations, investment theses, and barriers and enablers to success of sustainable... (More)

To address global sustainability challenges, major investments are required in sustainable businesses that deliver triple bottom line results. Although interest in sustainable businesses is on the rise, these businesses are not yet widespread. Venture capital investment has a key role to play in the development of sustainable start-ups. The research area of 'sustainable' venture capital is still emerging. More research is required to understand how venture capital can support the development of sustainable businesses. This paper provides insight into how venture capitalists can contribute to sustainable business success, by investigating their role, motivations, investment theses, and barriers and enablers to success of sustainable ventures. The following question is investigated: How can sustainable venture capitalists contribute to the success of sustainable start-ups? Interviews were conducted with an expert sample of leading sustainable venture capitalists and other key stakeholders in sustainable entrepreneurship. It was found that next to financial support, venture capitalists provide triple bottom line business advice and network support. Key success factors include business model innovation, collaborations and a strong business case, whereas failure factors include a lack of suitable investors, a strong incumbent industry and a short-term investor mind-set. Sustainable start-ups should focus on triple bottom line business model innovation, find opportunity in new technology and funding platforms and develop multiple business cases to create success beyond the 'green customer base'. Sustainable venture capitalists can help prove the success of sustainable business formats, mitigate financial risk through co-investments and exercise patience by balancing financial with social and environmental returns.

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author
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Impact investment, Scaling, SMEs, Sustainable business model, Sustainable entrepreneurship, Sustainable innovation
in
Journal of Cleaner Production
volume
108
pages
12 pages
publisher
Elsevier
external identifiers
  • scopus:84946478983
ISSN
0959-6526
DOI
language
English
LU publication?
no
id
a8185d7f-5469-469b-ad4b-f9a88d97c4b6
date added to LUP
2018-04-11 11:04:53
date last changed
2018-06-10 05:28:09
@article{a8185d7f-5469-469b-ad4b-f9a88d97c4b6,
  abstract     = {<p>To address global sustainability challenges, major investments are required in sustainable businesses that deliver triple bottom line results. Although interest in sustainable businesses is on the rise, these businesses are not yet widespread. Venture capital investment has a key role to play in the development of sustainable start-ups. The research area of 'sustainable' venture capital is still emerging. More research is required to understand how venture capital can support the development of sustainable businesses. This paper provides insight into how venture capitalists can contribute to sustainable business success, by investigating their role, motivations, investment theses, and barriers and enablers to success of sustainable ventures. The following question is investigated: How can sustainable venture capitalists contribute to the success of sustainable start-ups? Interviews were conducted with an expert sample of leading sustainable venture capitalists and other key stakeholders in sustainable entrepreneurship. It was found that next to financial support, venture capitalists provide triple bottom line business advice and network support. Key success factors include business model innovation, collaborations and a strong business case, whereas failure factors include a lack of suitable investors, a strong incumbent industry and a short-term investor mind-set. Sustainable start-ups should focus on triple bottom line business model innovation, find opportunity in new technology and funding platforms and develop multiple business cases to create success beyond the 'green customer base'. Sustainable venture capitalists can help prove the success of sustainable business formats, mitigate financial risk through co-investments and exercise patience by balancing financial with social and environmental returns.</p>},
  author       = {Bocken, N. M.P.},
  issn         = {0959-6526},
  keyword      = {Impact investment,Scaling,SMEs,Sustainable business model,Sustainable entrepreneurship,Sustainable innovation},
  language     = {eng},
  month        = {01},
  pages        = {647--658},
  publisher    = {Elsevier},
  series       = {Journal of Cleaner Production},
  title        = {Sustainable venture capital - Catalyst for sustainable start-up success?},
  url          = {http://dx.doi.org/},
  volume       = {108},
  year         = {2015},
}