50 shades of green—angel investing in green businesses

Botelho, T., Mason, C. and Chalvatzis, K. (2023) 50 shades of green—angel investing in green businesses. IEEE Transactions on Engineering Management, 70(3), pp. 950-962. (doi: 10.1109/tem.2022.3167282)

Abstract

Entrepreneurs will play a critical role in developing the technological solutions to achieve a successful transition to net carbon zero. Their ability to develop these innovations into market ready products requires access to finance. Angels play a critical role in financing the start of the entrepreneurial pipeline. However, their actual and potential role investing in green/clean businesses is not considered in either the business angel or socially responsible investment literatures. This article addresses this omission. It asks what motivates business angels to invest in green/clean tech businesses and how the weight of green/clean tech in their portfolios impacts the motivations to invest in this sector. Based on interviews with 65 investors, we show that the motivation of business angels for investing in green/clean tech opportunities differs according to the proportion of their investment portfolio that comprises green/clean tech investments. Those angels who invested solely in green/clean tech gave a higher weighting to economic motivations and lower weightings to Altruistic and Hedonistic motivations. Angels with less exposure to green/clean tech in their portfolios gave a higher weighting to Altruistic motivations and had lower weightings for economic and hedonistic motivations. Our findings have implications for policy-makers and to green entrepreneurs.

• Item Type: Articles
• Additional Information: This work was supported in part by TILOS project (Horizon 2020 Low Carbon Energy Local/small scale storage under Grant LCE-08-2014) and in part by the European Union’s Horizon 2020 Research and Innovation Programme under Grant 646529.
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Mason, Professor Colin
• Authors: Botelho, T., Mason, C., and Chalvatzis, K.
• College/School: College of Social Sciences > Adam Smith Business School > Management
• Journal Name: IEEE Transactions on Engineering Management
• Publisher: IEEE
• ISSN: 0018-9391
• ISSN (Online): 1558-0040
• Published Online: 27 May 2022
• Copyright Holders: Copyright © 2022 IEEE
• First Published: First published in IEEE Transactions on Engineering Management 70(3):950-962
• Publisher Policy: Reproduced in accordance with the publisher copyright policy