As powerful institutional investors, venture capitalists (VCs) play a crucial role in shaping the resource availability and strategic direction of their investee firms. This research examines the impacts of governmental venture capital (GVC) and private venture capital (PVC) on firm’s environmental, social, and governance (ESG) performance and explores how this relationship is moderated by managerial overconfidence, a key characteristic of venture managers. Based on a sample of Chinese enterprises, we find that GVC funding leads to higher ESG performance of investee firms, whereas PVC funding is associated with lower ESG performance. Furthermore, managerial overconfidence, reflecting venture executives’ risk-taking tendencies and reputation-driven motives, strengthens the positive effect of GVC funding and mitigates the negative effect of PVC funding on ESG performance. This study provides new insights into the differentiated influence of GVC and PVC funding on ESG performance and highlights the dynamic role of VC-manager relationship.
