Impact Tech Startups: A Conceptual Framework, Machine-Learning-Based Methodology and Future Research Directions

Abstract

The Impact Tech Startup (ITS) is a new, rapidly developing type of organizational category. Based on an entrepreneurial approach and technological foundations, ITSs adopt innovative strategies to tackle a variety of social and environmental challenges within a for-profit framework and are usually backed by private investment. This new organizational category is thus far not discussed in the academic literature. The paper first provides a conceptual framework for studying this organizational category, as a combination of aspects of social enterprises and startup businesses. It then proposes a machine learning (ML)-based algorithm to identify ITSs within startup databases. The UN’s Sustainable Development Goals (SDGs) are used as a referential framework for characterizing ITSs, with indicators relating to those 17 goals that qualify a startup for inclusion in the impact category. The paper concludes by discussing future research directions in studying ITSs as a distinct organizational category through the usage of the ML methodology.

The Entrepreneurial Perspective in Impact Investing Research: A Research Agenda

“…Due to their hybridity of achieving both financial return and sustainable positive impact, there is a high risk of mission drift to either side (Hazenberg, Seddon and Denny, 2015). Also, their collaborative and personal focus can limit them from properly extending and scaling their activities (Gidron et al, 2021).…”

“…Third, they should show irrepressible will and desire to embrace organizational change in order to move towards investment readiness (Hazenberg, Seddon and Denny, 2015). Impact investors seem to prefer tech-focused over purely social enterprises because they are credited with being able to generate higher impact due to their global market orientation (Gidron et al, 2021). Yet, they often operate in the social sector and due to their hybrid mission, they often do not have the ability to charge market prices.…”

“…Still, investors seem to understand that it takes longer to reach the break-even point and generate social impact at the same time. Hence, they are willing to accept longer repayment periods (Arena et al, 2018;Gidron et al, 2021).…”

“…Arena et al (2018) andGidron et al (2021) address social tech start-ups and impact tech start-ups. Techfocused start-ups use advanced technology to address current dominant social and economic challenges.…”

Determination of Success Criteria for Agricultural Social Startups in Indonesia

“…There has been a new, rapidly developing phenomenon in so-called 'social startup', organizations seeking to achieve the social mission through market mechanisms (Costa and Andreaus, 2020;Ebrahim et al 2014). With an entrepreneurial approach and a social mission at their core, social startups employ innovative strategies to address various social and environmental issues within a for-profit framework (Battistella et al 2021;Bocken 2015;Gidron et al 2021;Maiolini et al 2016). Unlike other startups formed primarily for commercial reasons, social startups aim to create positive social and environmental impacts; thus, they also benefit from a social or environmental cause (Gidron et al 2021).…”