Sustainable finance in entrepreneurship: perspectives of ventures and investors on mission scope and sustainability risk

Abstract

The grand challenge of addressing environmental and social sustainability issues through entrepreneurship has garnered significant global attention. Scholars across disciplines have responded to this pressing issue, leading to a surge in research studies aimed at exploring and understanding the complexities involved. This growing body of research underscores the urgent need for collaborative efforts to tackle grand challenges through entrepreneurial endeavors. This dissertation focuses on the intersection of entrepreneurship, environmental and social sustainability, and financial resources in three essays. Essay 1 provides a comprehensive overview of the research landscape of the emerging substream of sustainable finance in entrepreneurship (SFE). An interdisciplinary approach is adopted to cover a broad spectrum of literature on sustainable finance in entrepreneurship, extending to sustainability-oriented crowdfunding, microfinance, and socially responsible investing. By surveying the development of the literature on SFE, knowledge gaps are identified, and recommendations are offered on the theoretical scope and boundary conditions, addressing the “what, who, where, and when,” and outlining a trajectory for SFE research to advance into the academic mainstream. Essay 2 responds to one of the recommendations in Essay 1 to enhance the understanding of the temporal dynamics of SFE by conducting a longitudinal study. The study focuses on the perspective of entrepreneurs, specifically the resource-receiver side of the crucial investor–entrepreneur relationship in SFE. Drawing on the theoretical foundation of the attention-based view (ABV), I propose a non-linear relationship between the mission scope of early-stage ventures influences the acquisition of philanthropic financial resources. Essay 3 responds to the call in Essay 1 for more research on sustainability risk mitigation in entrepreneurship, rather than merely focusing on social value creation. The study examines the perspective of investors, focusing on the resource-provider side of the investor–entrepreneur relationship in SFE. I investigate how early-stage investment professionals respond to the environmental and social sustainability risk issues of their portfolio companies at the post-investment stage. This study contributes to stakeholder theory by highlighting nuances in investor influence strategies and advances SFE literature by providing insights into sustainability risk mitigation and the impact of personal beliefs.