Understanding the determinants behind Venture Capital decision making in sustainable agriculture technology

The present research wants to investigate the determinants by which venture capitalists make decisions in sustainable agtech. The agricultural sector demands a foundational transformation in order to carry out its responsibilities in the face of a dooming future. However, venture capital investment continues to be lacking behind. Sustainable agtech lays at the intersection between our agricultural system and rapid technological advances attempting to provide impact solutions to either reduce or reverse the detrimental effects of our society. In the face of a paradoxical condition, the research addresses the motivations for venture capital decisions to invest or not in the sector. With the aid of a revised theoretical framework drawing from extensive past literature on VC decision making, the study analyses the decisional process leading to an acceptance or rejection of an opportunity. The results of the interviews suggest that the low capital in the sector is a consequence of a mismatch between VCs criteria and startups deliverables. On one hand, VCs necessitate the presence of certain peculiar aspects in the potential ventures, as a result of their deep understanding of the complexities of the agricultural infrastructure, and of the perceived challenges of sustainable ventures. On the other hand, startups are struggling to present a solid case, as a result of their failed understanding of the sector, its mechanisms and its sustainable and economical needs. Therefore, the research points out the investment gap in the sector is a consequence of VCs sought after outcome, adequately adjusted in the face of agricultural and sustainability difficulties, and startups current outcomes, not sufficiently conform to these difficulties and in line with scientific impact metrics. Despite the visibility sustainable agtech has been recently receiving, the entrepreneurial supply seems not to respect the technological and sustainable transformation required by agriculture, and consequently VCs investment criteria. ​