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How do philanthropic venture capitalists choose their portfolio companies

Scarlata, Mariarosa and Alemany , Luisa (2010) How do philanthropic venture capitalists choose their portfolio companies. Working paper series, Social Science Research Network.

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Abstract

This paper examines the deal flow and screening process characterizing the philanthropic venture capital investment model. The practices explicitly adopted by philanthropic venture capitalists are then compared to those employed by traditional for-profit venture capitalists to understand whether the investment behaviour of the two investor categories is the same. By surveying the population of European and US philanthropic venture capitalists, results suggest that they originate and select deals similarly to traditional venture capitalists. However, they also adopt different deal origination criteria which are not traditionally used by venture capitalists, such as, incubation and direct creation of an organization in the event of not finding a suitable one. Furthermore, screening variables such as “deal terms” and “technology” are not considered to be as important as in the case of venture capital.

Item Type: Monograph (Working Paper)
Official URL: http://www.ssrn.com
Additional Information: © 2010 Social Science Electronic Publishing
Library of Congress subject classification: H Social Sciences > HG Finance
Journal of Economic Literature Classification System: G - Financial Economics > G2 - Financial Institutions and Services > G24 - Investment Banking; Venture Capital; Brokerage; Rating Agencies
M - Business Administration and Business Economics; Marketing; Accounting > M1 - Business Administration > M13 - Entrepreneurship
Sets: Departments > Finance
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 17 Dec 2010 14:42
URL: http://eprints.lse.ac.uk/30903/

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