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The emergence of green venture capital

Author

Listed:
  • Jelena Randjelovic
  • Anastasia R. O'Rourke
  • Renato J. Orsato

Abstract

Innovative financing mechanisms are needed to facilitate sustainable development. In the past few years, socially responsible investments have emerged as a successful type of financing scheme but many eco‐oriented start‐up companies remain under‐funded. Apparently, environmental innovations have only recently caught the attention of an important financial sector: venture capital (VC). The article describes the emerging phenomenon of environment‐related VC (or green VC) and provides an overview of the current market for this type of investment. The paper delves into this industry, revealing its characteristics, processes and mechanisms. The study also uncovers the main problems faced by eco‐entrepreneurs as well as venture capitalists interested in this type of venture. Finally, it analyses the drivers for green VC and attempts to identify the sources of innovation and the uniqueness of these emerging financial products. Based on the analysis, the paper also derives a definition of green VC. Copyright © 2003 John Wiley & Sons, Ltd and ERP Environment.

Suggested Citation

  • Jelena Randjelovic & Anastasia R. O'Rourke & Renato J. Orsato, 2003. "The emergence of green venture capital," Business Strategy and the Environment, Wiley Blackwell, vol. 12(4), pages 240-253, July.
    • Handle: RePEc:bla:bstrat:v:12:y:2003:i:4:p:240-253
    DOI: 10.1002/bse.361
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    References listed on IDEAS

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    1. Rennings, Klaus, 2000. "Redefining innovation -- eco-innovation research and the contribution from ecological economics," Ecological Economics, Elsevier, vol. 32(2), pages 319-332, February.
    2. Gompers, Paul A., 1998. "Venture capital growing pains: Should the market diet?," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 1089-1104, August.
    3. Thomas Dyllick & Kai Hockerts, 2002. "Beyond the business case for corporate sustainability," Business Strategy and the Environment, Wiley Blackwell, vol. 11(2), pages 130-141, March.
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    Cited by:

    1. Tommaso Cappellari & Gianluca Gucciardi, 2023. "Equity Investments and Environmental Pressure: The Role of Venture Capital," Sustainability, MDPI, vol. 16(1), pages 1-17, December.
    2. Laura Toschi & Elisa Ughetto & Andrea Fronzetti Colladon, 2023. "The identity of social impact venture capitalists: exploring social linguistic positioning and linguistic distinctiveness through text mining," Small Business Economics, Springer, vol. 60(3), pages 1249-1280, March.
    3. Pelin Demirel & Gamze Ozturk Danisman, 2019. "Eco‐innovation and firm growth in the circular economy: Evidence from European small‐ and medium‐sized enterprises," Business Strategy and the Environment, Wiley Blackwell, vol. 28(8), pages 1608-1618, December.
    4. Henk J. Steinz & Frank J. Van Rijnsoever & Frans Nauta, 2016. "How to Green the red Dragon: A Start‐ups' Little Helper for Sustainable Development in China," Business Strategy and the Environment, Wiley Blackwell, vol. 25(8), pages 593-608, December.
    5. María Andrea Trujillo Dávila & Alexander Guzmán Vásquez, 2008. "Venture capital: una mirada al constructo teórico, su rol en los nuevos emprendimientos y agenda de investigación futura," Revista Facultad de Ciencias Económicas, Universidad Militar Nueva Granada, June.
    6. Diane Holt, 2011. "Where are they now? tracking the longitudinal evolution of environmental businesses from the 1990s," Business Strategy and the Environment, Wiley Blackwell, vol. 20(4), pages 238-250, May.
    7. Marjo Elisa Siltaoja, 2014. "Revising the Corporate Social Performance Model – Towards Knowledge Creation for Sustainable Development," Business Strategy and the Environment, Wiley Blackwell, vol. 23(5), pages 289-302, July.

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