The role of venture capital in technology ventures’ sustainability and internationalization

Amid growing challenges related to climate change, scaling green technologies has become a critical imperative for technology ventures focused on sustainability. Similarly, increasing globalization and tightening competition compel technology ventures to accelerate the international rollout of their innovations to seize global growth opportunities. As technology ventures are often resource-constrained, venture capital (VC) plays a crucial role not only by providing financial resources but also by supporting them with strategic guidance, networks, and specialized capabilities and knowledge. This dissertation examines the drivers and outcomes of different types of VC investments in promoting sustainability and internationalization among innovative entrepreneurial ventures, with a particular focus on corporate VC and cross-border VC. By examining the resource profiles and value-added capabilities of heterogeneous VC investors, the dissertation investigates how corporate and cross-border VC shape venture-level green innovation and international innovation. The empirical analyses draw on a longitudinal sample of European innovative ventures that received VC investments between 2000 and 2019. Essay 1 examines the selection and nurturing effects of corporate VC on green innovation, finding that ventures with green innovation are more likely to receive corporate VC, particularly from corporate parents engaged in green innovation. However, only corporate VC investors with green resource complementarities actively nurture ventures’ green innovation post-investment. Essay 2 highlights the prevalence of cross-border corporate VC in green ventures, showing that complementarities between green ventures and corporate parents’ green resources drive these investment ties. This positive effect of green resource complementarity is further amplified when ventures are located in countries with weaker climate performance. Essay 3 explores how cross-border VC shapes ventures’ internationalization and innovation trajectories simultaneously. The findings indicate that ventures increase their international innovation following cross-border VC investment, with such innovation systematically directed toward the investors’ home countries. This dissertation contributes to research on VC and entrepreneurial finance, particularly corporate VC and cross-border VC, by highlighting investor heterogeneity and the critical role of dyadic venture-investor resource complementarities in explaining both how VC investment relationships are formed and how they influence venture innovation outcomes. By examining how technology ventures scale sustainable technologies and foster global innovation, the dissertation also advances related literature on sustainability, internationalization, and innovation. Finally, the findings offer practical implications for investors, policymakers, and entrepreneurs involved in VC financing, as well as for those focused on supporting the sustainability and internationalization of startups.