New Perspectives in Research on Corporate Sustainability series
Edited by Rolf Wüstenhagen, Jost Hamschmidt, Sanjay Sharma and Mark Starik
Chapter 12: Cleantech Venture Investors and Energy Policy Risk: An Exploratory Analysis of Regulatory Risk Management Strategies
Mary Jean Bürer and Rolf Wüstenhagen1 Venture capital (VC) investments are an important source of ﬁnancing for innovative entrepreneurial ﬁrms. The largest share of VC has traditionally been invested in a few sectors such as information and communication technology (ICT) or biotechnology. More recently, cleantech ventures are attracting increasing amounts of capital, with a particular focus on clean energy technology ventures. VC investments in clean energy can signiﬁcantly accelerate the market diﬀusion of climate-friendly technologies such as solar energy or clean biomass. While exhibiting strong growth rates and a surge in media attention in the most recent past (see Figure 12.1), these investments still represent a small percentage of the overall VC market. In previous research (Wüstenhagen and Teppo, 2006), we identiﬁed a number of sector-speciﬁc risks as a potential barrier to increasing levels of clean energy VC investments. Given the important role of regulatory drivers for sustainability in the energy sector, it is particularly important for government to understand investors’ perceptions of the risks (and opportunities) associated with energy and climate policies and how they manage these risks. LITERATURE REVIEW Regulatory Inﬂuences on VC Investments Regulatory inﬂuences can be identiﬁed on various stages of the VC investment value chain (see Figure 12.2). Traditionally, research on the linkage between government policy and the VC market has had a relatively narrow perspective on one particular 290 Cleantech venture investors and energy policy risk 291 Venture Capital PE for companies PIPEs (private...
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