Striking Gold in the Valley of Death

Striking Gold in the Valley of Death: Identifying Key Drivers of Venture Capital Investment in Sustainable Innovation

van der Hout, Edward (TU Delft Technology, Policy and Management)

Ward, Hauke (mentor)
Ortt, J.R. (graduation committee)
Rubinstein-Malamud, Liza (graduation committee)

Delft University of Technology
Universiteit Leiden

Industrial Ecology

2022-06-09

If we are to avert Climate Change, the world must reduce its net carbon footprint to zero in the coming decades. This will require an unprecedented shift in the technologies relied on in almost every part of the economy. Venture Capital can play a pivotal role in hastening the adoption of new technologies, but for investors to pursue a technology, certain conditions must be met. This research uses the Technological Innovation Systems (TIS) framework to qualitatively explore the nature of these conditions. It does this through a double case study of two technologies at the forefront of the “Climate Tech” investor movement: Electric Cars and Plant-Based Meat Alternatives. Combining literature research with interviews of both investors and people closely involved with these technologies, the research identifies several key building blocks as likely to affect investor interest. These building blocks include Product Quality (the product needs to be competitive on grounds other than its sustainability), Product Price (the product must be able to be sold at an initially significant premium), Production System (product components or materials as well as production capacity should be commoditized), and Customers (the product must be interesting to the mass-market). In both case studies, the ultimately successful companies showed that the existing niche fundamentally misunderstood the market. Through the lens of the TIS, this could be considered an Accident or Event, where a visionary founder challenges existing Knowledge of Application and Market. There is a significant level of overlap between the case studies, suggesting that this might be a key strategy to developing sustainable B2C innovations.

Technological Innovation System
Venture Capital
Cleantech
Sustainable Innovation
Battery Electric Vehicles
Plant-Based Meat Alternatives

http://resolver.tudelft.nl/uuid:4cdc9c3f-f455-4e7d-8e7f-6012f64c57a4

Student theses

master thesis

© 2022 Edward van der Hout