Emergence of Cleantech as an Investment Category - Public Discourse and Venture Capital Investment

Migendt, Michael; Taübe, Florian; Gilbert, Brett Anitra; Flotow, Paschen von

doi:10.2139/ssrn.2388656

Cited by 2 publications

(1 citation statement)

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“…They mention two mechanisms that determine emerging sectors' legitimacy: (positive) media attention and governmental support, which both hold for the green sector. First, Migendt et al (2013) report an increase in press articles on environmental technology topics and state that during the 2002-2008 period, it was Bhot^to invest in such technologies. Second, a myriad of policy tools (e.g., feed-in tariffs, R&D subsidies) were put in place to support clean energy sectors and other environment-friendly technologies (e.g., Bürer and Wüstenhagen 2009;Demirel and Kesidou 2011).…”

Section: Hypotheses Developmentmentioning

confidence: 99%

Is green the new gold? Venture capital and green entrepreneurship

2017

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We test whether born-to-be-green represents a signal toward potential venture capital (VC) investors on a sample of Italian, independent, unlisted, high-tech entrepreneurial firms. We employ several identification strategies by controlling for the major potential signals and the alleged selection bias between green and nongreen entrepreneurs. We exploit firm-level information about the Bactive search for VC financing.Â lternatively, we exploit the cross-local community variation in the awareness about environmental issues in an instrumental variable setting. Our results show that neither running a business based on green technologies nor positioning a business in a green sector per se are strongly correlated with the likelihood to get VC. Instead, we find that born-to-be-green can be a reliable signal for investors only when entrepreneurs perform activities based on green technologies/products and position their business in a green sector, at the same time. Further, we present three contingencies that moderate the association between green business propositions and the likelihood to get VC, namely the technical/scientific education of the founder(s), the origin of the firm as academic spin-out, and the presence of corporate shareholders into the venture's equity. The paper offers relevant managerial implications.

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Section: Hypotheses Developmentmentioning

confidence: 99%