Venture philanthropy (VP)’s main goal is to help create and grow stronger and more sustainable social enterprises (SEs). In order to do so, venture philanthropy organizations (VPOs), similar to traditional venture capital (VC), provide the SE with tailored financial resources and non-financial support. Whereas it is usually clear to VPOs how much money they invest (Scarlata & Alemany, 2010), there is less clarity in terms of the value added they provide through non-financial support, and the cost thereof.
Empirical studies have shown that the VC involvement in the companies they back consist of providing strategic and operational planning advice, helping with recruiting and shaping the management team (Gorman and Sahlman, 1989). VPOs engage in similar activities with the objective of adding value to their investees in three areas: financial sustainability/performance, social impact and organizational resilience (Boiardi & Hehenberger, 2015).
Hehenberger, Lisa and Alemany, Luisa
"ASSESSING THE VALUE ADDED OF VENTURE PHILANTHROPY (SUMMARY),"
Frontiers of Entrepreneurship Research: Vol. 37
, Article 7.
Available at: https://digitalknowledge.babson.edu/fer/vol37/iss15/7