The Fit Between Steward Ownership and Impact Startups: What Benefits and Costs Does Steward Ownership Bring for Impact Startups, in Which Cases Is it Best Suited and What Potential Does it Hold for the Future?

Abstract

This thesis examines the suitedness of steward ownership (SO) for impact startups by reviewing the existing literature on corporate governance, corporate purpose, mission drift, and impact investing and by conducting in-depth interviews with impact founders and impact investors from Germany and Denmark. SO, with its unique characteristics of separating ownership, control, and profit rights and thereby contradicting traditional corporate governance theory, is by some perceived as a great way to incorporate and safeguard the company’s purpose (Mayer, 2021). The findings indicate that SO is perceived as a positive concept and a good tool to safeguard the purpose and prevent mission drift. However, it comes with one main tradeoff: minimal access to traditional and impact venture capital, which is critical for rapid growth and scalability. Further, there seem to be different levels of risk to mission drift depending on the business model. I conclude by mapping out a concept that aims to assist in understanding the tradeoffs when incorporating SO. Notably, the research reveals a gap in existing literature concerning the application of SO in startup environments, indicating a need for further studies in this area to better understand its impacts and practical implications.