Securing venture capital for sustainability-driven ventures: an analysis of funding delay

This study explores the funding delays faced by Sustainability-Driven (SD) ventures when seeking investment from Venture Capitalists (VCs). SD ventures have a dual mission, targeting both economic returns and non-economic sustainability-oriented goals. We argue that this dual mission complicates VCs’ evaluation of these ventures’ and sets the stage for possible agency conflicts. Therefore, VCs might postpone investment in SD ventures to reduce uncertainty and mitigate these conflicts. Utilizing the global PitchBook dataset for empirical analysis, we find evidence that SD ventures experience delays in obtaining Venture Capital (VC) funding. Nevertheless, our research identifies specific investor- and market-level factors that can lessen these delays. Our results provide insights for SD ventures aiming to expedite VC funding during crucial early stages of their development.