Clean Energy Innovation and the Influence of Venture Capitalists' Social Capital

Till Fust

No 60-2020, CIES Research Paper series from Centre for International Environmental Studies, The Graduate Institute

Abstract: This study contributes to the understanding of the enabling role that venture capitalists can play in bringing new innovative technologies to market, with a focus on clean energy technologies. Applying the structural model introduced by Sorensen (2007) that allows to control for a potential sorting bias, I estimate the influence of venture capital investor's social capital on startups' funding and exit performance, with social capital de ned as the investors' eigencentrality and constraint within the network of investors. Looking at startups' first venture capital funding rounds in California between 2001 and 2019, this study finds a positive and significant influence of the lead investor's eigencentrality on the funding amount raised and the exit probability of the firm. Furthermore, a less constrained lead investor also increases the chance of the startup's eventual exit. But no differentiated effect for cleantech startups compared to other industries is found.

Keywords: Venture Capitalists; CleanEnergy; Clean Technologies; Startups; Capital Funding; Cleantech startup (search for similar items in EconPapers)
JEL-codes: O14 O33 Q41 Q42 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2020-09-29
New Economics Papers: this item is included in nep-cfn, nep-ene, nep-ent, nep-pay, nep-sbm, nep-soc and nep-tid
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