Legitimation of Cleantech Companies: Venture Capital Financing and Federal Government Funding

16 Pages Posted: 23 Mar 2014 Last revised: 14 Jun 2014

See all articles by Julian Lange

Julian Lange

Babson College - Arthur M. Blank Center for Entrepreneurship

Luke Fehsenfeld

Babson College

Ed Marram

Babson College

William D. Bygrave

Babson College - Arthur M. Blank Center for Entrepreneurship

Date Written: November 1, 2013

Abstract

We studied 56 venture-capital-backed companies that received financial support from the U.S. Department of Energy. We argued that those companies derived their legitimacy with the DOE in large part from their lobbying in Washington and from their venture capital firms. We reasoned that the greater their legitimacy from the viewpoint of the DOE, the more federal funding they received. We found that the amount of federal funding correlated with the amount of venture capital and with the amount spent on lobbying, but not with the reputation of their venture capital firms. Companies received, on average, one dollar of federal funding for each dollar of venture capital.

Suggested Citation

Lange, Julian and Fehsenfeld, Luke and Marram, Ed and Bygrave, William D., Legitimation of Cleantech Companies: Venture Capital Financing and Federal Government Funding (November 1, 2013). Available at SSRN: https://ssrn.com/abstract=2412937 or http://dx.doi.org/10.2139/ssrn.2412937

Julian Lange

Babson College - Arthur M. Blank Center for Entrepreneurship ( email )

231 Forest Street
Babson Park, MA 02457-0310
United States

Luke Fehsenfeld

Babson College ( email )

231 Forest St.
Babson Park, MA 02457-0310
United States

Ed Marram

Babson College ( email )

231 Forest St.
Babson Park, MA 02457-0310
United States

William D. Bygrave (Contact Author)

Babson College - Arthur M. Blank Center for Entrepreneurship ( email )

231 Forest Street
Babson Park, MA 02457-0310
United States

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