Do venture capitalists really invest in good industries? Risk-return perceptions and path dependence in the emerging European energy VC market | Zendy

Rolf Wüstenhagen | Zendy; Tarja Teppo | Zendy

Open Access

Do venture capitalists really invest in good industries? Risk-return perceptions and path dependence in the emerging European energy VC market

Author(s) -

Rolf Wüstenhagen,

Tarja Teppo

Publication year - 2006

Publication title -

international journal of technology management

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.368

H-Index - 57

eISSN - 1741-5276

pISSN - 0267-5730

DOI - 10.1504/ijtm.2006.009448

Subject(s) - venture capital , business , maturity (psychological) , social venture capital , investment (military) , industrial organization , risk perception , finance , market economy , commerce , economics , perception , psychology , developmental psychology , politics , political science , law , neuroscience , biology

Venture Capital (VC) plays an important role in the commercialisation of innovation. Sectors like information and communication technologies and biotech account for two-thirds of all VC investments. Little attention has been paid to understanding how the venture capital market extends to new industries. Based on a survey of European energy technology VCs, we discuss the factors determining the emergence of a new market sector for VC investments. While there are sizeable investment opportunities, only 2-5% of all venture capital is invested in energy. Three factors can help explain differences between energy and other more popular VC sectors: • the perceived risk (market adoption risk, exit risk, technology risk, people risk, and regulatory risk) of investments in energy technologies

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