Philanthropic Venture Capital: Can the Key Elements of Venture Capital Be Applied Successfully to Social Enterprises?

23 Pages Posted: 28 Feb 2008

See all articles by Mariarosa Scarlata

Mariarosa Scarlata

University of Surrey - Surrey Business School; ESADE Business School; London School of Economics & Political Science (LSE); University of Newcastle - Business School

Luisa Alemany

London Business School

Date Written: February 28, 2008

Abstract

This paper examines how the venture capital (VC) model is applied to philanthropic venture capital (PhVC). The key aims of the paper are a) to define PhVC and, by transposing its key elements, i.e., "capital" and "advice and engagement", to provide a clear and precise definition of philanthropic venture capitalists (PhVCs); b) to formulate four main hypotheses aiming to test whether, how, and to what extent the typical for-profit VC model, as described by Gompers and Lerner (2001), can be considered as applied to PhVC as well. By analyzing secondary sources we report preliminary results which show that in the screening phase of PhVC investments and during monitoring activities, PhVCs behave like their for-profit counterparts, i.e., the venture capitalists.

Keywords: Venture Capital, Venture Philanthropy, Social Entrepreneurship

JEL Classification: G24, M13

Suggested Citation

Scarlata, Mariarosa and Alemany, Luisa, Philanthropic Venture Capital: Can the Key Elements of Venture Capital Be Applied Successfully to Social Enterprises? (February 28, 2008). Available at SSRN: https://ssrn.com/abstract=1099277 or http://dx.doi.org/10.2139/ssrn.1099277

Mariarosa Scarlata (Contact Author)

University of Surrey - Surrey Business School ( email )

Guildford, Surrey GU2 8DN
United Kingdom

ESADE Business School ( email )

Av. de Pedralbes, 60-62
Barcelona, 08034
Spain

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

University of Newcastle - Business School ( email )

5 Barrack Road
Newcastle upon Tyne, NE1 4SE
United Kingdom

Luisa Alemany

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

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