An environmentally friendly company is just like any ordinary company; it thrives for success

Abstract: Purpose: To explore whether the view on Business Models and Value Creation, can explain the lack of Venture Capital investments in green start-ups, by examining how green start-up Entrepreneurs, and Venture Capitalist investors, view these two factors. Theoretical framework: The aim of this thesis is to address some of the key knowledge gaps in research available today, regarding why there is a lack of investments within the green start-up sector. By applying Behavioral Finance as a tool when examining Entrepreneurs and Venture Capitalist Investors view on certain factors, the goal is to receive a better understanding of the reasoning behind the investor’s decision-making. This case study will concentrate on the two factors, Value Creation, and Business Models, and together with Behavioral Finance these three theories will build up the theoretical framework of this thesis to find answer to the research questions and purpose. Methodology: This study is a qualitative case study of the view on Business Models and Value Creation with elements of an adductive approach. A theoretical framework was developed and compared to the empirical findings from eight semi-structured in-depth interviews. Results: To summarize the results, Venture Capitalist Investors view Value Creating and Business Models of green start-ups differently, but a general theme is that investors tend to be aiming more for Profit Maximization. On the other hand, green start-up Entrepreneurs view Value Creation and Business Models out of a Shared Value perspective, but realize the importance of building up an attractive track record. Behavioral Finance can to some extent function as a good tool and theory for explaining the underinvestment in green start-ups. A Skepticism towards the green start-up sector was described by several of the interviewees. The skepticism was grounded in a lack of “success stories” and track record within the green start-up sector and therefore the findings of this case study indicate that the view on green start-ups is to some extent damaged by several bad historical results, previous weak return on investment and lack of strong track records.