Eurosif (the European Social Investment Forum) has released the study, “Venture Capital for Sustainability, 2007”.
Based on a survey of European Venture Capitalists, the report reveals that Euro 1.25 billion of capital was raised in 2006 to invest in sustainable businesses. The sector now represents about 6% of the European VC market.
Eurosif’s Executive Director, Matt Christensen, states: “We are seeing an extraordinary upward growth curve in Private Equity/Venture Capital, which, in 2006, hit record levels of financing in both Europe and the U.S. At the same time, Venture Capital and Sustainability is increasingly being linked together as investors see that financial returns can also coincide with societal benefits.”
The research shows that the size of VC investments tends to range from Euro 1-5 million , focusing on the earlier stages of company development. A majority of VCs look for traditional VC returns (20-25%) from their sustainable investments.
One of the most important findings of the report is that a key factor still restraining growth of the VCs sector is the lack of capital being allocated from institutional investors. The survey reveals that VCs raises are often led by investors such as family offices and/or high net worth individuals.
Robin Edme, Eurosif’s president, concludes: “EU policy makers should review how EU-wide incentives can better foster a healthy European private equity market and VCs specifically.”
To view the “Venture Capital for Sustainability, 2007” study, please go to: