A Stage Model of Venture Philanthropy

This study explores the practices of venture philanthropy. A stage model is developed from an inductive analysis of high net worth entrepreneurs who are engaged in venture philanthropy. The study used a qualitative case study research strategy. Informant interviews were conducted with three main groups: the principal philanthropists, foundation philanthropy teams and leaders of investee organisations in receipt of funding. The findings suggest a model of venture philanthropy with eight distinct stages including: deal sourcing; relationship building, screening and information gathering; co-creation; early decision making; circular reasoning; deal structuring; post-investment after care; disengagement and return. Comparisons with venture capital, developmental venture capital and business angel investment are drawn and distinct similarities and differences are highlighted. This suggests that venture philanthropy is a hybrid model that incorporates elements of all three types of approaches.