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When Do Investors Fund Ventures with Social Objectives?

Yunus Emre Işık
Ph.D.
Ventures search for external funding to successfully launch and grow at their early stages. Some ventures, besides targeting financial goals, pursue social objectives. Aiming for social objectives is theorized to have mixed effects on angel investors and venture capital firms’ equity funding decisions. We use signaling theory to hypothesize that investors are more likely to invest in ventures with social objectives when ventures have a high profit focus or a low philanthropy focus. The relationship is negative for ventures with a low profit focus or a high philanthropy focus. A longitudinal dataset of 470 for-profit FinTech ventures support our moderation hypotheses.

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June 14, 2021 - 17:00