The Paradox of Impact-driven Growth: An Exploratory Study of How Impact-driven Start-ups Navigate Growth

Abstract

Sustainable development is increasingly prioritised on the global agenda, and while some argue that innovation and entrepreneurship present a promising solution for sustainability issues, start-ups face many difficulties when trying to get a foothold in the industry. Especially start-ups with a sustainable agenda can find it hard to meet the expectations of external stakeholders. This study explores how newly established impact-driven start-ups navigate growth and how they can balance financial and impact-driven growth. Literature within this field has increased in the recent years but is still limited on certain points such as alternative growth aspects. This study seeks to contribute to the field by providing a qualitative multiple-case study based on nine impact-driven start-ups with origin from Copenhagen School of Entrepreneurship. This study’s findings suggest that impact-driven start-ups perceive and navigate growth differently, and that the different aspects in their growth perception makes it a multi-faceted phenomenon. These circumstances create a paradox between growing financially and increasing the impact. The findings also include six Growth Challenges that affect impact-driven start-ups, as well as six Growth Enablers, that can positively support their growth. These findings are incorporated in a conceptual framework called the Growth Navigation model, which can be a tool for start-up founders, external stakeholders, or other interested parties in the industry to understand how impact-driven start-ups grow.