An Empirical Investigation of Impact Investment Categories for Early-Stage Venture Valuation – Global Versus Local Perspectives

In this research, we investigate the concept of impact for young venture valuation and identify relevant categories associated with this concept from the practitioner’s viewpoint. Impact investing is often referred to as double and triple bottom line, mission-based investing, program-based investing, blended value, economically oriented investing, and social finance. Entrepreneurs have the ability to contribute to sustainable development by creating new enterprises that serve society and initiate positive change. When it comes to getting financial support, depending on their stage, start-ups need to change and adapt their strategy to be able to grow in the long term. Therefore, it is necessary to know which general aspects founders need to consider for their business plan, to be able to attract as many investors as possible or to be eligible for as many funding programs as possible. Up to date, research proposes rather general impact categories that point out certain focus areas for certain investor types, e.g. for social impact startups. What categories are applicable in early-stage impact start-ups are not yet very clear nor scientifically in-depth proven. ... mehrFor this, a two-fold study has been conducted. This work investigates the following question: What underlying Impact criteria are used to assess the impact of early-stage startups?
From a research-based point of view, this work aims to contribute to the growing research on the topic of impact investment in an entrepreneurial setting. From a practical viewpoint, this study contributes to a conceptual clarification of impact, with its overarching frameworks as well as its underlying categories from an international perspective. In our paper and conference presentation, we would like to share the insights generated in our research and explore future paths for a more systematic approach towards Impact Investing for early-stage valuation of startups.