Comparing founders’ specific human capital in traditional versus philanthropic venture capital firms

This chapter examines the specific human capital held by founders of independent philanthropic venture capital (PhVC) and traditional venture capital (TVC) firms, using both qualitative and quantitative data. PhVC, like TVC, provides funding and value added services to its investees. A key difference, though, is that TVC firms hold a primary objective of creating an economic return on their investments, while PhVC firms seek a combination of economic and social returns on their investments. Our findings show that the specific human capital of firm founders mirrors the differing TVC and PhVC firm objectives. Specifically, TVC firm founders have higher levels of venture capital, finance, and technology experience, which is considered more economically oriented, while PhVC firm founders have higher levels of government, social enterprise management and social startup experience, which is considered more socially focused. For both TVC and PhVC firms, founders hold similar levels of senior management and consulting experience.