When Do Investors Fund Ventures with Social Objectives?
The Impact of Profit and Philanthropy Focus on External Equity Funding

Abstract:

Ventures search for external funding to successfully launch and grow at their early stages. Some ventures, besides targeting financial goals, pursue social objectives. Aiming for social objectives is theorized to have mixed effects on angel investors and venture capital firms' equity funding decisions. We use signaling theory to hypothesize that investors are more likely to invest in ventures with social objectives when ventures have a high profit focus or a low philanthropy focus. The relationship is negative for ventures with a low profit focus or a high philanthropy focus. A longitudinal dataset of 470 for-profit FinTech ventures support our moderation hypotheses.

Short Bio:

Yunus Emre Isik is a doctoral candidate at Saïd Business School, the University of Oxford. He conducts doctoral research in strategy and entrepreneurship under the supervision of Prof Pinar Ozcan and Prof Eero Vaara. Prior to starting his doctorate, Yunus Emre received a BA in Economics (high honors) and a BA in Management (high honors) from Bogazici University and studied a research master in Innovation Management at Rotterdam School of Management, Erasmus University. He has presented his work at Strategic Management Society's annual conferences.

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