Investigating the Roles, Influencing Mechanisms, and Outcomes of Private Equity and Venture Capital on Companies in High-Tech Renewable Energy Sectors

Abstract

Along with many environmental issues arising, such as climate change and extreme weather disasters, there has been a gradual increase in recognizing the importance of promoting green practices. Venture capital investors evaluate significantly more the environmental impacts of the business, and what the company has done to have a positive impact not only socially, but also on sustainability. Therefore, today, when analyzing a firm, the Environmental, Social, and Governmental (ESG) framework is considered in-depth. In this paper, the mechanisms behind PE/VC investment in renewable clean energy sector startups will be investigated. In addition, the influencing mechanisms, factors considered by PE/VC investors, and the characteristics of successful clean energy startups will be covered. Investors will then be able to make more informed decisions about prospects, potential growth, and development of this industry, while also examining why certain startups are successful as opposed to the countless others that collapse, aligning with the high-risk return balance of such an industry that has relatively greater levels of risk than others.