Navigating the Startup Landscape: The Social Impact of Venture Capital

Over the past few decades, venture capital has become increasingly popular as an effective financing tool for high-risk start-ups compared to traditional financial instruments. A combination of scientific, technical, economic, environmental and social aspects is leading to positive developments in venture capital investment. As more and more venture capital is invested in startups, less and less attention is paid by investors to the social aspects of investing. The main goal of venture capitalists is to make profits in the long run. The purpose of the study was to analyze the social impact of venture capital in startups and its relationship with the economic impact of the investment. In order to achieve the research objective, the method of systematic literature review was identified as the most appropriate method according to the previously established inclusion criteria. The results of the study showed that the main aspect that is determinant in the venture capital investment process is the logic followed by investors at different institutional levels. The analysis analyzed and compared the logic that pursues the financial goals of the activity and the logic that pursues the social goals of the investors and the startup team. As a result of the study, it was possible to establish that venture capitalists have a contradiction between the commercial logic and the social logic of the startup's functioning. It was found that this aspect is predetermined by institutional aspects such as mission, values, management models and decision logics. The results of this study have both practical and scientific significance. Although in modern conditions it is possible to achieve success if measures to promote sustainable functioning are implemented comprehensively, touching social, environmental and economic aspects at the same time. The scientific significance of this study is to better understand the relationship between economic and social aspects of venture capital for start-ups. The practical relevance of this study is that for startup founders, the results of this study can be a basis for properly designing institutional aspects to better attract investors.