Sustainable Venture Capital Investments: An Enabler Investigation

Abstract

Investing in sustainable projects can help tackle the current sustainability challenges. Venture capital investments can contribute significantly to the growth of sustainable start-ups. Sustainable venture capital (SVC) research is just emerging. This paper identifies enablers for sustainable venture capital investments in Saudi Arabia taking into account different stakeholders and firm's tangible and intangible resources. Using perspectives from venture capital experts in Saudi Arabia and the grey-based Decision-Making Trial and Evaluation Laboratory (DEMATEL) method, this study pinpoints the most critical enablers and investigates their causal and effect interconnections. The methodological process consists of reviewing the SVC literature and consulting the experts to identify the SVC enablers, creating a questionnaire, acquiring the answers from four experts, analyzing the data with grey-based DEMATEL and performing a sensitivity analysis. The government use of international standards, policies and regulations for sustainable investments, the commitment of the venture capitalists to sustainability and their deep understanding of sustainable business models are the most influential enablers. The paper concludes with implications for different actors, limitations and prospective directions for the sustainable venture capital research.

The Impact of Experience on Private Target Acquisition in High-Technology Industries

“…It will be interesting to investigate the impact of experience on acquisitions in other high-tech industries such as biotechnology industries. The results could be similar or different depending upon the industry and technology characteristics which affect motivation and mediating factors of private target acquisition [39,40]. Note: Heteroscedasticity-consistent t-ratios are in parentheses.…”

“…These results imply that early VC-backed experience effectively mitigates information asymmetry related to private target acquisition by NASDAQ firms in high-tech industries. Early VC-backed firms have developed firm-specific abilities to evaluate private companies with intangible resources, to assess and use information in the process of M&A deals, and to hedge risks and uncertainty [38,39].…”

The Role of Venture Capital Investment in Startups’ Sustainable Growth and Performance: Focusing on Absorptive Capacity and Venture Capitalists’ Reputation

“…As mentioned above, intangible assets from VC firms, such as their experience and knowledge, become valuable resources that contribute to the success and sustainability of startups [12,[49][50][51]. In order to generate high performance and sustain business activity, a firm needs the ability to absorb and utilize the acquired intangible assets.…”

“…Extant research on VC companies has examined a wide variety of topics, such as the characteristics of invested startups, the influence of VC investment on firms [7][8][9][10][11][12][13], the investment process of VC companies [5,6,14,15], the relationship between VC companies and startups [2], and the investment of VC companies by stage. Despite extensive academic efforts, the impact of VC financing on firm performance is still unclear, as previous studies have shown mixed results on this topic.…”

An Empirical Study on Internet Startup Financing From a Green Financial Perspective

“…Investing in sustainable projects can help one to deal with current sustainability challenges. VC investments can contribute significantly to the growth of sustainable start-ups [26]. In the traditional investment environment, entrepreneurs' preparedness has a significant impact on investors' investments.…”