Navigating Funding Success: The Role of Human and Social Capital Among Sustainability Startups in Germany: Do founders’ experiences and their startups’ networks affect funding success?

Details

Supervisors

Belleflamme, Paul ; Timmermans, Bram

Faculty

Louvain School of Management

Degree label

Master [120] : ingénieur de gestion, à finalité spécialisée

Abstract

enThis study investigates how human and social capital influence funding success for sustainability startups in Germany, addressing the critical research gap regarding structural determinants in sustainability-driven entrepreneurial ventures. Despite their pivotal role in addressing global environmental challenges, sustainability startups often encounter financial and structural barriers due to technological complexity, market uncertainties, and capital intensity. This research aims to analyse how founders' experiences (professional, founding and educational) in sustainability, and startups' network characteristics (size, strength, embeddedness, and CEO-led mobilisation) impact their funding success. Employing a quantitative, deductive research approach, the study utilises a correlational research design, gathering primary data on 165 sustainability startup founders in Germany via an online questionnaire. Data were analysed through descriptive statistics, correlations, and regression analyses to test hypotheses grounded in human and social capital theories. Key findings indicate that founders' and CEO-specific professional, founding and educational experiences in sustainability do not significantly enhance funding success. Among network characteristics, only network size and tie strength to financial stakeholders, such as venture capitalists, business angels, and banks, positively and significantly influence funding success. Conversely, tie strength to non-financial stakeholders does not significantly affect funding success. Furthermore, nationally embedded networks compared to local, regional, and international counterparts and CEO-led network mobilisation do not significantly enhance funding success. However, the findings highlight that a broader geographic reach of startup network contacts significantly increases funding success. These findings suggest critical implications for both theory and practice. Theoretically, the study advances structural determinants of entrepreneurial performance within sustainability contexts. Practically, results provide actionable insights for entrepreneurs on strategically leveraging networks, guide investors in identifying promising ventures, and offer entrepreneurial support organisations and policy makers tailored recommendations for enhancing their support structures. Future research is encouraged to explore longitudinal effects and diverse geographical contexts to deepen understanding of funding dynamics in sustainability entrepreneurship.