Mainstreaming sustainable deep tech venture capital. A multiple comparative case study of deep tech venture capital funds'sustainability frame institutionalization

Abstract

This thesis investigates the position and trajectory of sustainability in deep tech venture capital (VC) funds. VC plays a vital role in the development of startups that develop technological innovation for societal and planetary challenges. The study uses the frame institutionalization theory and a literature review on sustainable investment as a theoretical foundation to investigate the perspectives that VC funds hold on sustainability. This was empirically tested through a multiple comparative case study consisting of five Dutch VC funds. The results show that all funds are showing traces of merging the frames of sustainable innovation and venture capital, and some show traces of challenging the traditional financial market systems. The inherent link between disruptive innovation and sustainable innovation makes focusing on startups with societal impact a natural process. However, practical execution of managing ESG and impact of the portfolio is a struggle. In conclusion, Dutch deep tech VC funds participate in mainstreaming the sustainable investment frame by reframing the purpose of deep tech to make a disruptive societal impact. Future research could study external factors that increase the mainstreaming, such as regulation and prominent financial players devesting from non-sustainable assets.