Developmental venture capital

Conceptualizing the field

Research output: Contribution to journalArticle

11 Citations (Scopus)

Abstract

Developmental venture capital is the financing of businesses with equity and near-equity in order to achieve both social and financial objectives. The social returns include economic development of distressed urban and rural geographies; creation of high-quality jobs for low-income populations; building wealth for women and people of color; and creation of products that benefit society, such as those that lower poverty or contribute to a cleaner environment. This article introduces a conceptual framework for the developmental venture capital industry based on the social objectives of individual funds. The framework distinguishes between funds that have corrective versus additive objectives. Funds with corrective objectives are designed to address inadequate access to traditional venture capital by specific geographies and populations. Funds with additive objectives are meant to further specific social goals, such as fighting poverty or environmental degradation. This framework further differentiates between two forms of corrective venture capital, based on the capital access obstacles that each is trying to address and whether the resulting economic models require subsidy.

Original languageEnglish (US)
Pages (from-to)335-360
Number of pages26
JournalVenture Capital
Volume11
Issue number4
DOIs
StatePublished - Oct 1 2009

Fingerprint

Venture capital
Equity
Poverty
Geography
Economic development
Low income
Wealth
Industry
Social returns
Subsidies
Financing
Job quality
Conceptual framework
Environmental degradation

All Science Journal Classification (ASJC) codes

  • Finance

Keywords

  • Community development venture capital
  • Developmental venture capital
  • Public venture capital
  • Social entrepreneurship
  • Social venture capital

Cite this

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Developmental venture capital : Conceptualizing the field. / Rubin, Julia.

In: Venture Capital, Vol. 11, No. 4, 01.10.2009, p. 335-360.

Research output: Contribution to journalArticle

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