Impact orientation and venture capital financing: The interplay of governmental, social impact and traditional venture capital

• Impact-oriented start-ups are more likely to receive funding from GVC and SIVC. • Both social and environmental orientation increase funding probability from SIVC. • Social impact orientation drives funding results for GVC funding. • Impact-oriented ventures are more likely to secure TVC when GVC and SIVC co-invest. In addition to traditional venture capital (VC), governmental VC and social impact VC investors have emerged as alternatives to fund entrepreneurial ventures, especially start-ups that incorporate social and/or environmental objectives into commercial operations. Using a sample of 15,510 VC-backed start-ups, we show that impact-oriented ventures are more likely to receive funding from alternative VCs. Both social and environmental orientations increase the chances that a start-up secures funding from impact VCs while social orientation drives results for government VCs. Importantly, we also show that impact-oriented ventures are more likely to secure investment from traditional VCs when impact and governmental VCs co-invest.