Sustainable Venture Capital

TL;DR

This paper explores how venture capital can support sustainability initiatives, emphasizing the importance of stakeholder interests and revealing how investor preferences vary across demographics and align with UN SDGs.

Contribution

It introduces a nuanced view of venture capital's role in sustainability, highlighting stakeholder considerations and analyzing investor preferences related to SDGs.

Findings

Significant gender and generational differences in investment preferences.

Strong correlations between investor profiles and specific SDGs.

Evidence that sustainability-focused startups can succeed without traditional profit motives.

Abstract

Sustainability initiatives are set to benefit greatly from the growing involvement of venture capital, in the same way that other technological endeavours have been enabled and accelerated in the post-war period. With the spoils increasingly being shared between shareholders and other stakeholders, this requires a more nuanced view than the finance-first methodologies deployed to date. Indeed, it is possible for a venture-backed sustainability startup to deliver outstanding results to society in general without returning a cent to investors, though the most promising outcomes deliver profit with purpose, satisfying all stakeholders in ways that make existing 'extractive' venture capital seem hollow. To explore this nascent area, a review of related research was conducted and social entrepreneurs & investors interviewed to construct a questionnaire assessing the interests and intentions of current & future ecosystem participants. Analysis of 114 responses received via several sampling methods revealed statistically significant relationships between investing preferences and genders, generations, sophistication, and other variables, all the way down to the level of individual UN Sustainable Development Goals (SDGs).