Financing Sustainable Innovation: How VC and CVC Shape Start-up Autonomy, Networks, and Culture

In the context of the twin transition, sustainability must be understood not only in ecological or social terms, but also as a firm’s capacity for long-term adaptability and innovation. For start-ups in particular, innovation is an essential factor for long-term market survival in rapidly evolving market environments. Accordingly, understanding how different types of financial partners - such as venture capital (VC) and corporate venture capital (CVC) - shape the conditions under which innovation emerges becomes a critical concern for research and practice. It conceptualizes sustainability and the circular economy not from a mere business model perspective, but more broadly as a firm’s capacity to sustain innovation and generate long-term value for society. Based on a quantitative survey with Swiss start-ups, the findings show that VC-backed firms report higher autonomy – an essential condition for long-term, sustainability-oriented innovation. CVC-backed start-ups exhibit more heterogeneous patterns, especially regarding network access and decision-making freedom. The findings underscore the importance of aligning investor models with the innovation needs of sustainability-driven ventures.