How the type of venture capital funding (CVC vs. IVC) affects company sustainability and financial performance?

• Main Author: Grept, Charlène Maèva
• Publication Date: 2023
• Format: Master thesis
• Language: eng
• Source: Repositórios Científicos de Acesso Aberto de Portugal (RCAAP)
• Download full: http://hdl.handle.net/10400.14/42514
• topic: Corporate Venture Capital; Independent Venture Capital; Green innovation; Environmental performance; Financial performance; Capital de Risco Corporativo; Capital de Risco Independente; Inovação verde; Desempenho ambiental; Desempenho financeiro

This study explores the influence of venture capital (VC) funding types on company sustainability and financial performance. While corporate venture capital (CVC) has been extensively studied, the impact of independent venture capital (IVC) and the comparison between the two remain understudied. Analysing data from CVC-funded and IVC-funded companies in the United States over a 25-year period (1998-2022), we investigate the relationships between environmental performance, green innovation, and financial performance. The findings indicate that CVC-funded companies demonstrate higher Environmental, Social, and Governance (ESG) scores compared to IVC-funded counterparts, highlighting the positive effect of CVC on sustainable practices. However, no significant difference is observed in terms of green innovation impact between the two funding types. Interestingly, CVC-funded companies display lower levels of Corporate Social Responsibility (CSR) practices compared to IVC-funded firms. Regarding financial performance, the results are mixed, emphasizing the complex relationship between funding types and outcomes. Further research is needed to comprehensively understand the underlying mechanisms at play. These findings have important implications for both research and practice, emphasizing the significance of considering venture capital investments, whether CVC or IVC, to integrate ecological considerations for enhanced overall performance. This study contributes to advancing corporate sustainability and financial decision-making, leading to a more prosperous and sustainable future.