Biodiversity Entrepreneurship

Cao, Sean and Karolyi, G Andrew and Xiong, William W and Xu, Hui (2025) Biodiversity Entrepreneurship. Review of Finance. ISSN 1572-3097 (In Press)

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Abstract

We study an emerging class of start-up organizations focused on biodiversity conservation and the challenges they face in financing these ventures. By fine-tuning a large language model (LLM), we identify 630 biodiversity-linked start-ups in PitchBook and compare their financing dynamics with those of other ventures. Biodiversity start-ups raise less capital but attract a broader coalition of investors, including not only venture capitalists (“value investors”) but also mission-aligned impact funds and public institutions (“values investors”). Values investors provide incremental capital rather than substituting value investors, but funding gaps persist. We show biodiversity-linked start-ups use social media (Twitter) activity to help connect with value investors. Our findings can inform policy and practice for mobilizing private capital toward biodiversity preservation, emphasizing hybrid financing models and strategic communication.