Investor Influence on Startups' Sustainability Orientation: Exploring Causation and Effectuation Approaches

Sammanfattning: This study investigates the influence of investors on the sustainability orientation of startups and the use of causation and effectuation approaches. The aim of the study is to gain a comprehensive understanding of how and why investors influence startups in their sustainability orientation, and what impact this has on the use of causation and effectuation decision-making logics. While there are several studies on how sustainability orientation affects the funding success of, for example, venture capitalists or crowdfunding campaigns, little is known about how startups deal with their sustainability orientation to attract new investors, or after they have found and collaborated with an investor. The question here is to what extent startups allow themselves to be influenced by investors in their sustainability orientation, i.e. whether they increase, maintain or decrease it. In order to explore this context, the following research question was formed:  How does investor funding affect the sustainability orientation of startups, and how does this change the ongoing decision-making approach of startups?  We chose to use a qualitative research method in which interviews were conducted with Swedish startups. The interviews included questions about participants' experiences, feelings, and perceptions of investor influence on their sustainability goals, as well as approaches to causation and effectuation based on the characteristics of the theory established in the theoretical framework. During the interviews with the startups, we looked at different funding sources such as venture capitalists, business angels and local investment companies, and also considered different rounds of funding such as seed and startup funding.  The results of the study show that investors have an impact on the sustainability orientation of startups when there is a trade-off between the sustainability goals of the startups and the economic goals of the investors. In such cases, startups tend to neglect the environmental or social goals in order to enable the achievement of the investors' economic goals. This leads to a lower sustainability orientation and a stronger focus on economic objectives. With regard to the use of causation and effectuation logics, it can be seen that the startups influenced in their sustainability orientation switch from a causation logic before investor financing to an effectuation logic after investor financing in relation to the company's goals. All other examined characteristics of causation and effectuation, such as vision, strategies, conception of the product or service and the handling of uncertainty, do not indicate any changes.  Finally, this study adds insights to the existing theory of causation and effectuation on how a change in sustainability orientation affects the use of causation and effectuation logic. However, the study also has limitations, which is why we suggest that future studies conduct the study again in a new setting, e.g. in a different country and with different startups, in order to validate the results against the limitations.