Impact Start-Ups in Search of Legitimacy to Attract Funding

This research explores the challenges faced by impact-driven start-ups in attracting funding. These ventures must demonstrate their economic viability while asserting their social and environmental legitimacy, a combination that can be complex for investors accustomed to purely financial criteria. Drawing on neo-institutional theory, the study analyzes how entrepreneurs’ narratives align with the expectations of various impact investors. Based on a corpus of written pitches and semi-structured interviews, an automated textual analysis is conducted to identify the factors influencing investment decisions. The findings highlight the importance of reducing informational asymmetry between investors and entrepreneurs, particularly through the use of standardized international impact assessment criteria. The ultimate goal is to inform public policy to better support these start-ups driving systemic innovation, and to encourage investors to integrate social and environmental dimensions into their decision-making processes.