Philanthropic venture capital: can the key elements of venture capital be applied successfully to social enterprises

This paper examines how the venture capital (VC) model is applied to philanthropic venture capital (PhVC). The key aims of the paper are a) to define PhVC and, by transposing its key elements, i.e., "capital" and "advice and engagement", to provide a clear and precise definition of philanthropic venture capitalists (PhVCs); b) to formulate four main hypotheses aiming to test whether, how, and to what extent the typical for-profit VC model, as described by Gompers and Lerner (2001), can be considered as applied to PhVC as well. By analyzing secondary sources we report preliminary results which show that in the screening phase of PhVC investments and during monitoring activities, PhVCs behave like their for-profit counterparts, i.e., the venture capitalists.