Purpose-Driven Investments: Applying the Three-Pillar Model to Venture Capital for UN SDGs—A Comparison of the USA and Europe

Kenan Pala () and Serhat Pala ()
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Kenan Pala: Cross Ocean Ventures
Serhat Pala: Cross Ocean Ventures

Chapter 18 in The Sustainable Organization, 2025, pp 335-355 from Springer

Abstract: Abstract This chapter explores the potential of venture capital in addressing global challenges by aligning investment strategies with the United Nations Sustainable Development Goals (SDGs). It introduces the Three-Pillar Model—Sustainable Purpose, Traveling Organization, and Connected Resources—as a framework to balance social impact and financial sustainability. This chapter examines the contrasting venture capital ecosystems of the USA and Europe, highlighting the USA’s high-risk, market-driven approach versus Europe’s government-led, impact-oriented model. Proposing a hybrid model that integrates venture philanthropy with traditional venture capital practices, it argues for embedding SDG alignment within the organizational DNA of purpose-driven funds, rather than retrofitting impact goals into existing profit-driven ventures. Such a shift would leverage organizations inherently aligned with sustainable goals, creating a natural synergy between financial viability and social impact. The chapter provides actionable recommendations, including policy incentives, risk-sharing mechanisms, and the establishment of VC-as-a-Service partnerships to attract private capital while preserving sustainability. This approach addresses Europe’s scalability and risk challenges, fostering ecosystems that empower transformative SDG-aligned innovation. It concludes by emphasizing the importance of structural reforms to enable this hybrid model’s success, advocating for a reimagined venture capital landscape that drives both economic and societal progress.

Keywords: Purpose-driven investments; Three-pillar model; UN SDGs; Venture capital; Contrasting venture capital ecosystems US and Europe (High-risk; Market-driven Approach vs. Government-led; impact-oriented model); Hybrid model; Establishment of VC-as-a-service partnership; Philanthropy (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:fuobcp:978-3-031-89549-4_18

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DOI: 10.1007/978-3-031-89549-4_18

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