The effect of founder experience on the performance of philanthropic venture capital firms

Abstract

This article is the first known study assessing the relationship between the experiences of the philanthropic venture capital firm's founding team, and their venture firm's economic, social, and total performance. Results indicate that commercial and social experience help economic and social performance respectively. However, when pursuing the maximization of both social and economic performance, philanthropic venture capital firms perform best when the founding team has high levels of commercial experience and low levels of social experience.

Firms with benefits: A systematic review of responsible entrepreneurship and corporate social responsibility literature

“…Further, current RE work on crowdfunding (Lam & Law, 2016;Meyskens & Bird, 2015) and sustainable VC (Bocken, 2015;Scarlata et al, 2016) could be complemented by studies investigating the impact of responsibility initiatives on funding success (e.g., with angel investors or commercial VCs; Marcus et al, 2013). Further, current RE work on crowdfunding (Lam & Law, 2016;Meyskens & Bird, 2015) and sustainable VC (Bocken, 2015;Scarlata et al, 2016) could be complemented by studies investigating the impact of responsibility initiatives on funding success (e.g., with angel investors or commercial VCs; Marcus et al, 2013).…”

“…In this context, the challenge of balancing the three dimensions of the TBL deserves greater attention. Further, current RE work on crowdfunding (Lam & Law, 2016;Meyskens & Bird, 2015) and sustainable VC (Bocken, 2015;Scarlata et al, 2016) could be complemented by studies investigating the impact of responsibility initiatives on funding success (e.g., with angel investors or commercial VCs; Marcus et al, 2013). Relatedly, it may be of interest to examine whether and how venture valuations are affected by entrepreneurial responsibility efforts and how responsible start-ups perform from an aggregate perspective (mirroring some of the CSR research around CSP indexes).…”

The Expat Gap: Are Local‐Born Entrepreneurs in Developing Countries at a Disadvantage When Seeking Grant Funding?

“…While social enterprise represents a market‐oriented approach to traditional development challenges, practitioners recognize the inherent market failures in many regions and the need for grants to accelerate market development. In recent years, we have seen the growth of specialized foundations (often founded by successful former entrepreneurs) that apply venture capital strategies to charitable giving, referred to as “venture philanthropy” (Terjesen, Bosma, and Stam ) or “philanthropic venture capital” (Scarlata and Alemany ; Scarlata, Zacharakis, and Walske ). Private philanthropic foundations in the United States alone made nearly 3,000 grants focused on entrepreneurship in developing countries between 2010 and 2014, totaling $536 million (Aspen Network of Development Entrepreneurs ).…”

“…Perhaps the most well‐known example of the use of grants to support private sector development in international development is in the microfinance sector, where grants and subsidies from the World Bank, the Ford Foundation, and other donors have enabled microfinance providers such as Grameen Bank to access commercial markets and achieve financial sustainability (Dees ). Grant funding can be essential in helping nascent social ventures in underdeveloped markets move closer to profitability (Dees ; Koh, Karamchandani, and Katz ; Scarlata, Zacharakis, and Walske ), and it remains the most popular financial instrument used by public sector aid agencies (Rogerson et al ). Grant financing is a core component of entrepreneurship policy even in developed economies such as the United States, with programs to spur innovation and economic development (Hall ; Howell ) and to overcome systemic barriers faced by minorities (Carpenter and Loveridge ; Mauldin ).…”

“…In response to these barriers, aid agencies have developed programs to support entrepreneurship in developing countries, such as the World Bank's Development Marketplace (Hoyos and Angel‐Urdinola ), the U.S. Agency for International Development's Development Innovation Ventures and Partnerships to Accelerate Entrepreneurship programs, and similar efforts by the U.K. and Australian aid agencies (Rogerson et al ). Matching this growth is the profusion of private actors under the category of “venture philanthropy” (Terjesen, Bosma, and Stam ) or “philanthropic venture capital” (Scarlata and Alemany ; Scarlata, Zacharakis, and Walske ).…”