The influence of uncertainty on venture capital investments in renewable energy technology : an exploratory study
Year: 2008
Type: dissertation
Abstract: The rate at which the climate is changing due to the exploitation of fossil fuel suggests that there is great emergency to speed up the development, commercialization, and diffusion of renewable energy technologies. Firms based on new technology (NTBFs) are widely recognized as propulsive in bringing new technologies to the market. Intriguingly, recurring studies report on severe difficulties experienced by NTBFs as regards getting access to sufficient growth capital. The traditional capital market’s failure to provide finance has made venture capital a sine qua non of innovation in such firms. Being a lever of innovation and thus central to the issue of climate change, better understanding of what influences venture capital investments in renewable energy technologies is crucial. Equity investing is an uncertain undertaking. This thesis aims at investigating what sources of uncertainty are relevant in relation to investments in renewable energy technologies. Telephone interviews were conducted with nine Swedish venture capital firms. It was found that technological uncertainty, market adoption/consumer uncertainty, competitive uncertainty and political, or regulatory, uncertainty were influential. Based on these results this thesis offers a discussion of implications for venture capital firms, technology developers and other actors in the innovation system. The discussion centers on the importance of networking. \nKey words: venture capital, renewable energy technology, uncertainty
Author: Karolin Sjöö
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2213010092