From ambition to evidence: a practical tool for startup impact assessment

Impact-driven startups face major challenges in measuring and reporting their social and environmental impacts. In a related manner, impact investors face challenges when attempting to assess the impact of startups. This is primarily due to a lack of comparability and transparency. Despite the proliferation of tools and frameworks, a misfit persists between the capabilities of startups and the expectations of investors. Resource constraints have a significant impact on the capacity of startups to engage in complex impact measurement. Current impact assessment tools are often ill-suited to the needs of startups, as they require extensive data that smaller companies may not have readily available. The present study proposes a design science research approach to derive design knowledge for the impact assessment of startups and subsequently develop a new tool tailored to the needs of startups. The purpose of this tool is to enable startups to measure and report their potential impact efficiently. The objective is to enhance transparency, comparability, and legitimacy, thereby helping startups attract investment while aligning their business activities with their social and environmental missions.