Smart money for social ventures: an analysis of the value-adding activities of philanthropic venture capitalists

Eline L. Ingstad, Mirjam Knockaert and Yves Fassin

Venture Capital, 2014, vol. 16, issue 4, 349-378

Abstract: Philanthropic venture capitalists (PhVCs) provide social entrepreneurs with financial and nonfinancial resources. This paper studies how and why PhVCs engage in value-adding activities. Employing an inductive case study method, our study shows that value-adding activities engaged in by PhVCs are similar to the activities carried out by traditional venture capitalists. Further, we find self-efficacy and goal setting theories to be particularly relevant in studying why PhVCs engage in value-adding activities. Concretely, PhVCs engage in value-adding activities that are in line with their efficacy beliefs and that facilitate the achievement of lower-order goals related to professionalization, self-sustainability, and expansion. As such, they aim at reaching the higher-end goal of scaling the social venture.

Date: 2014
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DOI: 10.1080/13691066.2014.988379

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