Impact orientation and venture capital financing: The interplay of governmental, social impact and traditional venture capital

Valentina Lo Mele, Anita Quas, Patrick Reichert and Stefano Romito

Finance Research Letters, 2024, vol. 68, issue C

Abstract: In addition to traditional venture capital (VC), governmental VC and social impact VC investors have emerged as alternatives to fund entrepreneurial ventures, especially start-ups that incorporate social and/or environmental objectives into commercial operations. Using a sample of 15,510 VC-backed start-ups, we show that impact-oriented ventures are more likely to receive funding from alternative VCs. Both social and environmental orientations increase the chances that a start-up secures funding from impact VCs while social orientation drives results for government VCs. Importantly, we also show that impact-oriented ventures are more likely to secure investment from traditional VCs when impact and governmental VCs co-invest.

Keywords: Government venture capital; Impact orientation; Entrepreneurial finance; Impact investing (search for similar items in EconPapers)
JEL-codes: G11 G24 G32 L26 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:68:y:2024:i:c:s1544612324010171

DOI: 10.1016/j.frl.2024.105987

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