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Smart money for social ventures: an analysis of the value-adding activities of philanthropic venture capitalists

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  • Eline L. Ingstad
  • Mirjam Knockaert
  • Yves Fassin

Abstract

Philanthropic venture capitalists (PhVCs) provide social entrepreneurs with financial and nonfinancial resources. This paper studies how and why PhVCs engage in value-adding activities. Employing an inductive case study method, our study shows that value-adding activities engaged in by PhVCs are similar to the activities carried out by traditional venture capitalists. Further, we find self-efficacy and goal setting theories to be particularly relevant in studying why PhVCs engage in value-adding activities. Concretely, PhVCs engage in value-adding activities that are in line with their efficacy beliefs and that facilitate the achievement of lower-order goals related to professionalization, self-sustainability, and expansion. As such, they aim at reaching the higher-end goal of scaling the social venture.

Suggested Citation

  • Eline L. Ingstad & Mirjam Knockaert & Yves Fassin, 2014. "Smart money for social ventures: an analysis of the value-adding activities of philanthropic venture capitalists," Venture Capital, Taylor & Francis Journals, vol. 16(4), pages 349-378, October.
    • Handle: RePEc:taf:veecee:v:16:y:2014:i:4:p:349-378
    DOI: 10.1080/13691066.2014.988379
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    References listed on IDEAS

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    1. Julia Sass Rubin, 2009. "Developmental venture capital: conceptualizing the field," Venture Capital, Taylor & Francis Journals, vol. 11(4), pages 335-360, July.
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    Cited by:

    1. Islam, Syrus M. & Habib, Ahsan, 2022. "How impact investing firms are responding to sustain and grow social economy enterprises in light of the COVID-19 pandemic," Journal of Business Venturing Insights, Elsevier, vol. 18(C).
    2. Syrus M. Islam, 2022. "Impact investing in social sector organisations: a systematic review and research agenda," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(1), pages 709-737, March.
    3. Nachyła, Pola & Justo, Rachida, 2024. "How do impact investors leverage non-financial strategies to create value? An impact-oriented value framework," Journal of Business Venturing Insights, Elsevier, vol. 21(C).
    4. Russo, Michael V. & Earle, Andrew G. & Lahneman, Brooke A. & Tilleman, Suzanne G., 2022. "Taking root in fertile ground: Community context and the agglomeration of hybrid companies," Journal of Business Venturing, Elsevier, vol. 37(2).
    5. Islam, Syrus M., 2020. "Towards an integrative definition of scaling social impact in social enterprises," Journal of Business Venturing Insights, Elsevier, vol. 13(C).

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