This paper examines the deal origination and the selection process adopted by philanthropic venture capitalists when deciding which social organizations to include in the portfolio they manage. The origination and screening practices as well as the selection variables explicitly considered by philanthropic venture capitalists are then compared to those taken into account by traditional for-profit venture capitalists to understand whether or not the behaviour of the two investor categories is the same. The research is based on a sample representing 54% of the European and US population of philanthropic venture capitalists. Philanthropic venture capitalists appear to originate and select deals like traditional venture capitalists. However, they also adopt different deal origination criteria which are not traditionally used by venture capitalists, i.e., incubation and direct creation of an organization in the event of not finding a suitable organization. Furthermore, selection variables such as deal term and technology are not considered to be as important as in the case of venture capital.

ESADE

Back to home

Scarlata, Maria Rosa Giovanna; Alemany Gil, Luisa

How do philantropic venture capitalists choose their portfolio companies?

This paper examines the deal origination and the selection process adopted by philanthropic venture capitalists when deciding which social organizations to include in the portfolio they manage. The origination and screening practices as well as the selection variables explicitly considered by philanthropic venture capitalists are then compared to those taken into account by traditional for-profit venture capitalists to understand whether or not the behaviour of the two investor categories is the same. The research is based on a sample representing 54% of the European and US population of philanthropic venture capitalists. Philanthropic venture capitalists appear to originate and select deals like traditional venture capitalists. However, they also adopt different deal origination criteria which are not traditionally used by venture capitalists, i.e., incubation and direct creation of an organization in the event of not finding a suitable organization. Furthermore, selection variables such as deal term and technology are not considered to be as important as in the case of venture capital.
More Knowledge
How do philantropic venture capitalists choose their portfolio companies?
Scarlata, Maria Rosa Giovanna; Alemany Gil, Luisa
EFMA 2009 Annual Conference
UniversitÓ Commerciale Luigi Bocconi
Norfolk (United States of America), 27/06/2009 - 30/06/2009

Download full text (There might be some restrictions due to copyright or licenses)

  • fullText
  • File 1 (0.15Mb) pdf

Related publications

Back to home