MSc in Sustainable Management Master Thesis 15 credits
Class of 2020/2021
Business Developers in the 21st [Sustainable] Century
A comparative case study of how and why Swedish business developers implement sustainability in their cooperation with start-ups
Johannes Bäck Frida Ullberg
Supervisor: Fredrik Sjöstrand
1 ACKNOWLEDGEMENTS
First of all, we would like to thank our supervisor Dr. Fredrik Sjöstrand and our peers who participated during the seminars this spring. Thank you for all the valuable feedback, support and wise opinions.
We would also like to thank all the interviewees who participated in this study and gave us valuable inputs and insight into the field of business development and sustainability.
Finally, we want to thank each other for a good collaboration and informative conversations!
Johannes Bäck & Frida Ullberg Visby, June 2, 2021
2 ABSTRACT
This paper investigates the relationship between business developers and start-ups in the field of sustainability. More specifically, the study analyzes how and why Swedish business developers, in terms of incubators, financiers, and advisors, implement sustainability in their cooperation with start-ups. Each year, thousands of businesses are founded which need support in various ways, it could be anything from advising to financial help. Ever since the UN launched Agenda 2030 and the Government of Sweden launched its new climate policy, it is clear that everyone needs to do something to help the world towards a better future. This study is based on qualitative interviews with six different business developers and applies the theories: stakeholder and shareholder theory, triple bottom line, creating shared value, green growth, and open innovation. The result showed that how business developers implement sustainability in their cooperation with start-ups varies, but is based on economic, social, and environmental sustainability. Some developers work more actively than others, but it is done through an exchange of knowledge between business developers and start-ups. Further, why business developers use sustainability is either as a tool to gain a competitive advantage and help start-ups grow or to increase their profits.
Keywords: Business developers, Start-ups, Sustainability, Incubators, Financiers, Advisors.
3 TABLE OF CONTENTS
1 INTRODUCTION ... 5
1.1 Background ... 5
1.2 Problem ... 6
1.3 Purpose and Research Question ... 7
2 PREVIOUS RESEARCH ... 8
2.1 Incubators and Start-ups ... 8
2.2 Financiers and Start-ups ... 9
2.2.1 Funding from Venture Capitalists ... 9
2.2.2 Public Funding from Government ... 10
2.3 Advisors and Start-ups ... 11
2.4 Discussion of Previous Research ... 11
3 THEORETICAL BACKGROUND ... 13
3.1 Traditional and Sustainable Business Models ... 13
3.1.1 Shareholder Theory and Stakeholder Theory ... 13
3.1.2 Triple Bottom Line ... 13
3.1.3 Creating Shared Value ... 15
3.1.4 Green Growth ... 17
3.2 Collaboration and Business Development ... 18
3.2.1 Open Innovation ... 18
3.3 Theoretical Framework ... 19
4 METHODOLOGY ... 21
4.1 Research Design & Philosophical Approach ... 21
4.2 Data Collection ... 22
4.2.1 Sampling ... 22
4.2.2 Conducting Qualitative Interviews ... 23
4.3 Data Analysis ... 24
4.4 Method Discussion ... 25
5 EMPIRICAL RESULT ... 26
5.1 Incubators ... 26
5.1.1 Science Park Gotland ... 26
5.1.2 Dalarna Science Park ... 27
5.2 Financiers ... 29
5.2.1 Vinnova ... 29
5.2.2 Almi Invest ... 30
5.3 Advisors ... 32
5.3.1 Drivhuset ... 32
5.3.2 Almi Business Partner ... 33
6 ANALYSIS ... 35
6.1 How Business Developers Implement Sustainability ... 35
6.1.1 Incubators ... 35
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6.1.2 Financiers ... 37
6.1.3 Advisors ... 38
6.2 Why Business Developers Implement Sustainability ... 40
6.2.1 Incubators ... 40
6.2.2 Financiers ... 41
6.2.3 Advisors ... 42
6.3 Summary of Analysis ... 43
7 CONCLUSION & DISCUSSION ... 44
7.1 Conclusion ... 44
7.2 Discussion ... 45
7.2.1 Implications and Limitations of the Study ... 45
7.2.2 Proposal for Further Research ... 46
REFERENCES ... 48
APPENDICES ... 53
5 1 INTRODUCTION
The study’s first chapter gives a background to the field of sustainability, start-ups, and business developers. Thereafter follows a section that describes the problem and the gap this study aims to fill. The chapter ends with a presentation of the study’s purpose and research question.
1.1 Background
The UN World Commission on Environment and Development stated, in 1987, the urgent need for change. In the Brundtland Report, the definition of sustainable development was created:
“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (WCED, 1987, p. 37).
Later, in 2017, the Government of Sweden adopted a new climate policy framework which is one of the most important steps in Swedish history in terms of long term sustainable actions.
The framework includes a new climate law, a climate policy council, and new climate goals.
A central part of the goals is that by 2030, Sweden will reduce its emissions by 63% compared to 1990, and be completely climate-neutral by 2045 (The Swedish Government, 2017).
In the transition towards a low-carbon society, companies have a great responsibility by providing opportunities to develop sustainable solutions and adapt to climate change (Wbcsd, n.d.). Much of the research about how to handle environmental challenges and implement responsible practices have traditionally focused on large multinational corporations since they receive a lot of media attention and, also, the target in various government set sustainability regulations (Blundel et al., 2013; Hamann et al., 2017). However, each year between 65 000 and 70 000 new companies are founded in Sweden, and 99,9% of every business, in general, is a small or medium enterprise (SME) with no more than 249 employees (Growth Analysis, n.d.A; n.d.B).
To achieve sustainable development, the actions and decisions made by large corporations can not solely be what are focused on. The European Commission (2012, para. 1) states that “[...]
SMEs, and especially start-ups, can be the ideal incubators for eco-innovation, and can bring to market new, less environmentally damaging products, services and processes”. Besides, there is a need to guide entrepreneurial firms in a sustainable direction since SMEs have an essential role in addressing environmental challenges (Blundel et al., 2017). “A startup is a
6 young company founded by one or more entrepreneurs to develop a unique product or service and bring it to market.” (Fontinelle, 2020, p. 1). Unlike established companies, start-ups often have greater opportunities to take advantage of market failures and change society towards a more sustainable one through innovative and technical solutions (Schaltegger & Wagner, 2011;
Dean & McMullen, 2007). However, start-ups often lack financial and human resources due to their newness. External support and open innovation are therefore often crucial for their survival (Spender et al., 2017). The idea of open innovation is that companies should collaborate and share knowledge over organizational boundaries. Instead of only looking for ideas internally in the company, one should use external sources to reach better performance (Chesbrough, 2003).
As the benefits of collaborating have become more noticed, and a large number of start-ups launch every year, the demand for business development has increased. A business developer can support start-ups in different ways depending on its motives. For example, the support can be by offering financial means, counselling managerial experience, or other resources. Most start-ups need to seek external capital to be able to develop. Either it can be obtained from pure venture capital firms (Chen, 2020) or from the state government, which increasingly supports new initiatives to promote innovation (Howell, 2017). Furthermore, incubator firms represent another form of business developers which aim to help companies until they reach a stage when they can manage themselves. Unlike pure financiers, these companies offer other resources than merely financial capital. For example, they can provide help with services such as access to office space, administrative help, mentorship and advisory, or act as a link to capital investors (Kenton, 2020).
1.2 Problem
As mentioned, a large number of start-ups and SMEs are created each year and many of them need guidance and capital to further develop. When a company is in its early stage, the opinions of financiers and advisors are highly valuable. Research shows that cooperation between start- ups and business developers leads to better performance and exchange of knowledge, which positively impacts the innovation process (Spender et al., 2017). This could mean that business developers have the opportunity to influence numerous new businesses and their work regarding sustainability. However, much of the literature on start-ups and business developers
7 tend to focus on the impact in terms of economic growth (Kohler, 2016; Stokan et al., 2015), and hence not take a broader perspective where sustainability is included.
Previously, researchers have focused on the start-up side of the relationship between start-ups and business developers (Fujiwara, 2013; Lukeš et al., 2019; Wang & Schott, 2020). Besides, literature tends to focus on a specific sort of cooperation, exclusively investors or incubators, for example (Amatucci et al., 2013; Bocken, 2015; Gliedt et al., 2018). But according to open innovation actors in the market need to collaborate and share knowledge with each other (Chesbrough, 2003). Since companies have a great responsibility in solving the climate issue, many new companies are founded every year, and business developers have the opportunity to influence early in the entrepreneurial process, it can be considered needed with a broader perspective. Not least to help Sweden in the process towards the goal of becoming climate- neutral in 2045. Therefore, we try to undertake this gap and broaden the scope of literature in the field of business developers and start-ups. From a business developer perspective, this study focuses on different cooperation models between business developers and start-ups.
1.3 Purpose and Research Question
This study aims to investigate the relationship between business developers and start-ups in the field of sustainability. More specifically, the study analyzes how and why Swedish business developers, in terms of incubators, financiers, and advisors, implement sustainability in their cooperation with start-ups. Hence, the study seeks to answer the following research question:
How and why do Swedish business developers implement sustainability in their cooperation with start-ups?
8 2 PREVIOUS RESEARCH
The following chapter gives a presentation of previous research on the relationship between different types of business developers and start-ups. It also addresses studies that touched on the topic of sustainability in the relationship between business developers and start-ups. The chapter ends with a short discussion of the previous research and how it relates to this study.
2.1 Incubators and Start-ups
Incubation is a business model that helps entrepreneurs in the start-up stage, to develop their business idea and make it grow. The definition of incubators has varied and evolved over time, but a recent definition has been developed by Latouche (2019, p. 20): “an incubator is a structure which offers services adapted to support the creation or the development of new firms, whose objective varies according to its promoter”. Gliedt et al. (2018) studied how business incubators could contribute to a green economic strategy through their work with start-ups.
According to Gliedt et al. (2018), incubators play a vital role in the regional economy by leading to thousands of jobs and millions of dollars of local economic impacts. They do so by acting as innovation intermediaries, often linked with universities. Moreover, incubators can help attract, retain and expand firms in niche industries. Environments where industries focus on sustainability and a sustainable transition could be one of the niche industries. Gliedt et al.
(2018) focused on incubators in the United States, but examples from Sweden were also shown.
For example, they stated that Swedish incubators implement sustainability with their tenants and that they, in turn, need to have implemented sustainability within their business plans and goals (Gliedt et al., 2018).
Further, Bank and Kanda (2016) investigated incubators in Sweden, Germany, and Finland with a sustainable profile. All incubators in the study had sustainability as a part of their mission, either by focusing on start-ups within certain sustainable sectors, such as sustainable IT, green buildings, or start-ups with a sustainable business plan. The study’s analysis showed that sponsors of the incubators were very crucial to who the incubators cooperate with. The Swedish example was from the Swedish university of agriculture (SLU) and their incubator Green Tech Park (GTP) in Skara, which had a very narrow and specific mission from their sponsor. GTP’s mission was to only invest in and help tenants who have a sustainable focus.
However, it was challenging for GTP to fill all their spots which made them switch focus, and
9 accept more tenants. The researchers concluded that, if an incubator with a sustainable focus is not able to fill its spots the incubator must broaden its criteria (Bank & Kanda, 2016).
According to Baskaran et al. (2019), the view on business incubators is that they have a fundamental role in producing economic growth, but has more recently been viewed as also being responsible for inclusive growth and social inclusion. The authors also argued that SMEs are adaptable organizations that can shift depending on their surrounding environment.
However, SMEs often lack funding, resources and skills and in this, business incubators have a vital role. The role of a business incubator is to generate inclusive growth and should not only be viewed as a place where inclusive growth could happen (Baskaran et al., 2019).
Furthermore, Ahmed et al. (2020), investigated the relationship between business incubators and entrepreneurship. Their study showed that incubators, among other business development programs, have a positive influence on sustainable entrepreneurship growth. The programs are beneficial for entrepreneurs that want to start a business which, in turn, create more jobs and economic growth (Ahmed et al., 2020).
2.2 Financiers and Start-ups
There are several ways for a start-up to obtain funding. In this study, we refer to either investment from venture capital firms or public funding from the state government in terms of grants or subsidiaries.
2.2.1 Funding from Venture Capitalists
According to Barry et al. (1990), a venture capitalist is an active investor who usually provides a company with financial capital at important stages of development in the company’s life cycle. The investor strives to offer the company added value and long-term cooperation in business development. To contribute with a rich network in terms of customer relationships, potential employees, and suppliers, the investor usually specializes in a particular industry.
Barry et al. (1990), state that venture capitalists have a major impact on the formation of new companies and their development. Further, research shows that venture capitalists have a significant positive impact on innovation (Kortum & Lerner, 2000), but also, tend to invest in start-ups with strong technical skills that request expertise, since they often risk failure in a short time (Baum & Silverman, 2004).
10 Traditionally, research has focused on financial and strategic motives behind investors' decisions to support start-ups, and not on sustainability. Investors differ and often have different degrees of financial and strategic motives behind their investment decisions (Röhm et al., 2018). Dushnitsky and Lenox (2006) argue that investments made with a strategic purpose can increase firm value to a greater extent than those made only to obtain a financial outcome. However, Bocken (2015) investigated how venture capitalists contribute to sustainable business success. An increasing number of investors seek to invest in sustainable and socially responsible business ideas, which can be referred to as sustainability venture capitalists. When making investment decisions, these investors look for companies that will generate a triple bottom line benefit and, therefore, have a positive social and environmental impact, in addition to the financial one. The study’s results showed that cooperation is a key success factor for sustainable business and investors can contribute with network possibilities and significant support in sustainable business models. Meanwhile, the lack of sustainable venture capitalists is highlighted as a possible factor for the failure of sustainable start-ups (Bocken, 2015).
A recent study by Hegeman and Sørheim (2021) investigated the motivators behind investments made by different types of corporate venture capitalists in cleantech start-ups. The study indicates that there are motives behind the investment, other than strategic and financial ones. When investing in start-ups with an environmental focus, the investor increases its green attributes, by making the company more environmentally friendly and creating a greener portfolio. Besides, it also enables the investors to increase their legitimacy among stakeholders (Hegeman & Sørheim, 2021).
2.2.2 Public Funding from Government
In recent years, the interest in state financial support for entrepreneurs has increased. It is because entrepreneurs, and especially start-ups, have a strong connection to innovation as they are willing to take higher risks than more established companies, and also help create new important technologies and industries. It is accepted by governments that innovation is necessary as it, in turn, contributes to economic growth and a more developed society (Lerner, 2009). A study by Howell (2017) investigated what effect R&D grants have on start-ups. The results showed “that early-stage grants have large, positive effects on cite-weighted patents, finance, revenue, survival, and successful exit” (Howell, 2017, p. 1162). Moreover, Howell
11 (2017) states that firms can use grants to reduce uncertainty and risks, which opens up investment opportunities.
In a recently published study, Zhao and Ziedonis (2020) investigated the impact of government R&D funding on performance in tech start-ups. The empirical findings were collected from 241 start-ups who applied for funding through a specific program between the years 2002 and 2006, in the United States. Their findings showed that the R&D program had a major effect on the survival of start-ups in the coming years. Besides, companies that participated in the program found it easier to later receive capital from a venture capitalist. The program was
“particularly beneficial for firms that were very young, lacked prior track records of external fundraising, and based outside the dominant hub of entrepreneurial activity.” (Zhao &
Ziedonis, 2020, p. 17).
2.3 Advisors and Start-ups
In an article by Amatucci et al. (2013), sustainability and its role in relation to entrepreneurship education are studied. The authors write that the businesses’ experience is a global sustainability revolution, especially in regards to environmental concerns. Amatucci et al.
(2013) state that our natural resources cannot sustain the current economic development.
Furthermore, the authors describe a new type of entrepreneurs that is called sustainable entrepreneurs which are entrepreneurs who try to balance the three forms of capital, human, environmental and economic. Amatucci et al. (2013) conclude that the start-up phase is an ideal phase to incorporate sustainability into the business and a person’s advice and education to the start-ups should include sustainability. It can lead to a competitive advantage and increase the chance of the start-up to survive and even maximize value (Amatucci et al., 2013).
2.4 Discussion of Previous Research
The previous research covers different fields of business developers such as incubators, financiers, and advisors. Hence, all studies help us to better understand the relationship between developers and start-ups and contribute to answer how and why business developers implement sustainability. That is because they, to some extent, touch upon the relation between developers and start-ups in various ways. Most of the research investigates the traditional relationship between business developers and start-ups, and how developers impact the companies they support. Something that is recurring in the previous studies, is the insight that business
12 developers have a big impact on start-ups in their process of building the company and helping it grow. However, the focus has been on development in terms of economic growth. Some of the studies touched upon sustainability but in those cases, the developers had a sustainable niche, such as the incubator GTP (Bank & Kanda, 2016) and the corporate venture capitalists that focused on cleantech start-ups (Hegeman & Sørheim, 2021). No study focused simply on the developers’ view on sustainability and how they use it in their cooperation with start-ups.
Besides, the previous research in this field has focused on one type of business developer, for example entirely on incubators or financiers. Therefore, there seems to be a gap in the literature of studies examining several types of business developers in parallel. Besides, it can be considered valuable to investigate if business developers have a positive impact in terms of sustainability since business developers have a positive impact on business development. This is why we, in this study, want to investigate how and why Swedish business developers implement sustainability in their cooperation with start-ups.
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3 THEORETICAL BACKGROUND
In the following chapter, the theories used for analyzing the empirical data are presented. It starts with a presentation of how traditional business models have been debated and developed into new, more sustainable ones. Thereafter, the theories triple bottom line, creating shared value and green growth are presented. This is followed by a section about open innovation.
The chapter ends with a presentation of the study’s theoretical framework. All theories contain elements that can be related to both the how and the why in the study’s research question.
However, green growth and triple bottom line are mainly used to analyze the ‘how’ while stakeholder and shareholder theory, as well as creating shared value, and open innovation are more connected to the ‘why’.
3.1 Traditional and Sustainable Business Models
3.1.1 Shareholder Theory and Stakeholder Theory
In 1970, Friedman expressed his thoughts regarding a company’s social responsibility and advanced the well-known Friedman doctrine, also known as the shareholder theory. Friedman was pro-market and economic liberalization and believed that a company’s only goal is to maximize the value for its shareholders. A company should make as much profit as possible and have no further responsibilities towards society, except for its shareholders (Friedman, 1970). The Friedman doctrine has been questioned by several researchers who argue that companies carry responsibility towards other stakeholders than only the shareholders.
Opposing Friedman's view of social responsibility, companies must integrate social values into their decision-making (Davis, 1973; Mulligan, 1986). Congruent, Freeman (2010) questions the shareholder theory and introduces the stakeholder theory which emphasizes that success is about satisfying all stakeholders of a company. For example, it requires inspired and committed employees as well as good relationships with suppliers. According to stakeholder theory, it is valuable for the company to engage in activities that are not just about maximizing profits (Freeman, 2010).
3.1.2 Triple Bottom Line
Triple bottom line (TBL) was formed by Elkington (1999) in his book “Cannibals with forks”.
The theory opposes the usual business model that companies only need to focus on growth.
According to Elkington, a company needs to have more than one bottom line. To be more
14 sustainable, companies should include a social and environmental bottom line in addition to the financial one. The TBL framework could also be referred to as the three P’s (people, planet, and profit). However, the financial bottom line is easy to measure by, for example, measuring sales and purchases. Elkington (1999) means that it is harder to measure the social and environmental perspectives. Elkington’s book was written almost 25 years ago and the technology has developed since then. This is something Elkington (1999) is aware of and he discusses that the social and environmental bottom lines probably will be easier to measure when more companies start to use the TBL.
In practice, Elkington (1999) describes four ways of how the TBL can be used. First, the lines are seen as separate and stable lines that do not connect. In a company, this could mean that the three bottom lines are set for a longer period, i.e. more profit, less waste and less sick leave by 2030. The next step, according to Elkington, is when the lines are not stable anymore. Here, a company could change its targets depending on economic cycles or environmental trends.
The first two ways are better for small companies with a less complex structure. The following two examples are more complex - as the economy tends to be - and represent scenarios when the lines interfere with each other. Elkington (1999) means that one should consider the lines as continental plates which sometimes collide with each other. The last evolution of the TBL is when these continental plates collide and create something called “shear zones”. A shear zone can be both an environmental and economic target. Elkington (1999, p. 78) highlights an example about eco-efficiency and writes that a company can deliver “goods and services that satisfy human needs and bring quality of life, while progressively reducing ecological impacts and resources intensify throughout the life cycle, to a level at least in line with the Earth’s estimated carrying capacity”.
However, TBL has not been without criticism. One of the critical points concerns the difficulty of measuring the two non-financial dimensions, the social and environmental bottom lines (Norman & MacDonald, 2004; Sridhar & Jones, 2013). Moreover, companies tend to separate the three dimensions in practice, hence lack broader systems thinking (Sridhar & Jones, 2013).
In response to the practical problem of measuring the social and environmental dimension of TBL, Slapper and Hall (2011) propose monetizing social welfare and environmental damage or calculating it in terms of an index. Social variables that can be measured include health and well-being, quality of life, and education. Environmental variables include influence on natural resources or energy consumption. These variables are also used by Dainienė and Dagilienė
15 (2015), in their theoretical framework which measures the value of social innovations. The framework is based on the three pillars in TBL where each dimension is measured based on traditional variables (similar to those presented above by Slapper and Hall) together with indicators recommended by Sustainability Reporting Guidelines, more specifically GRI G3 (Dainienė & Dagilienė, 2015).
3.1.3 Creating Shared Value
Creating shared value was introduced by Porter and Kramer (2011, p. 4) who define it as
“creating economic value in a way that also creates value for society by addressing its needs and challenges.”. The first idea of shared value was mentioned by the authors five years earlier in an article that questioned how companies apply Corporate Social Responsibility (CSR) in their business activities. Porter and Kramer (2006) argued it could be done more effectively to benefit both the company and society and base their argument on two main reasons. Firstly, the idea that companies tend to think of businesses and society as two dependent factors that, in fact, are interdependent. Secondly, instead of relating a company’s CSR activities to its specific business strategy, managers tend to apply a broader overall approach. The company needs to select some specific social issues to focus on and address these needs in a way that creates shared value. Besides, the chosen issues should be in line with the company’s values and in an area where it has an opportunity to influence (Porter & Kramer, 2006).
Furthermore, Porter and Kramer (2006) argue that a company's ability to develop and create shared value is closely linked to strategic CSR, which means that the company goes beyond good corporate citizenship and chooses a position that is unique to its competitors by reducing its costs or increasing value. Strategic CSR enables the company to increase social value by strengthening its competitiveness whilst simultaneously benefiting society. To successfully integrate business and society, it is necessary that the company adapts its operations and strategically makes the right decisions regarding which social issues to focus on. Hence, the shared value should be created based on a long-term approach and Porter and Kramer (2006) believe that it can be linked to the process of developing research and development.
In 2011, creating shared value was described as “the new major transition of business thinking”
(Porter & Kramer, 2011, p. 4), and a new way for companies to succeed. The theory criticizes the old view of capitalism where companies contribute to society by solely making profits and hence reducing unemployment, and supporting with taxes and investments. Porter and Kramer
16 (2011) argue that more is required from companies nowadays, and the earlier ‘business as usual’ tendencies are inefficient and neither creates competitive advantages nor true innovation.
According to Porter and Kramer (2011), shared value can be created in three different ways which all are strongly connected. The first way of creating shared value is through reconceiving products and markets. Corporations have huge power to influence markets and customers to engage in more socially beneficial products, for example, healthier food and more sustainable products. It is therefore important that a company identifies which social needs to focus on as well as addresses what can be harmful and costly for the business. The second way is by redefining productivity in the value chain. Companies are greatly affected by external events and social issues in society, which often lead to high costs. Events that are costly to the environment can also be costly to the business, an example which is mentioned by Porter and Kramer (2011) is greenhouse gases. Through a deeper understanding of a company's productivity, a shared value perspective can simultaneously solve social issues and reduce costs. Areas in which productivity can be affected include logistics and distribution, use of resources, and employee productivity. Finally, the third way is through building supportive industry clusters at the company’s locations. Every company’s opportunity to succeed is affected by the nearby environment of companies as well as infrastructure. It is, therefore, important to build supportive industry clusters that can increase productivity while managing failures and gaps in society (Porter & Kramer, 2011).
However, the theory of creating shared value has generated a lot of debate. Creating shared value has been praised by researchers who, in line with Porter and Kramer, believe that creating shared value is a successful development from Friedman’s narrow focus on profit maximization (Bosch-Badia et al., 2013). Meanwhile, the theory has been criticized for being unoriginal: “its core premises bear a striking similarity to existing concepts of CSR, stakeholder management, and social innovation” (Crane et al., 2014, p. 134), and used more as a buzzword than a solid concept (Dembek et al., 2016). However, as a way of dealing with the issues of applying shared value in practice, new frameworks have been developed based on Porter and Kramer’s (2011) original thoughts. For example, in a study by Moon et al. (2011), an extended version of the theory is presented by adding defining core competence as a fourth parameter of how companies can create shared value. Furthermore, Moon et al. (2011, p. 62) argue that
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“collaborating with other organizations, whether they are domestic or international, will enhance the effects of CSV [creating shared value] within and across national borders”.
3.1.4 Green Growth
Another term that has developed when discussing economic growth and environmental issues is green growth. The term was first coined in the article Economic growth, carrying capacity, and the environment by Arrow et al. (1995). The paper was originally from a scholarly meeting in Sweden in 1995. A group of scientists discussed and developed a paper around growth and environmental issues. In the paper, they problematize the argument that economic growth is good for the environment since it is only based on empirical data on the relationship between income per capita and environmental quality. Arrow et al. (1995, p. 91) argue that “as income goes up there is increasing environmental degradation up to a point, after which environmental quality improves”. This is called an inverted U-curve. The inverted U-curve refers to the environmental damage related to income per capita. When a country is poor and not yet developed, it cannot focus on environmental issues and meanwhile gain economic growth and a higher standard of living. When the country has reached a certain level of living standard and economic development, it can focus more on environmental concerns by applying legislation and other forms of protection for the environment. Arrow et al. (1995) do not see economic liberalization and promotion of Growth National Product (GNP) as something that could replace environmental policies. The market is not able to fix itself and there is a need for a combination of growth and environmental policies that do not stand in conflict with each other (Arrow et al., 1995).
Since the term was coined, it has evolved and become a dominant response to climate change.
Green growth attempts to solve some of the biggest global problems, by addressing the negative environmental impact and dealing with social problems. At the same time, proponents of green growth believe that a sustainable future cannot be achieved without taking into account the current political-economic system (Dale et al, 2016). “As a theory, green growth asserts that continued economic expansion (as measured by Gross Domestic Product, or GDP) is or can be made to be compatible with our planet’s ecology.” (Hickel & Kallis, 2020, p. 469). However, the theory has been criticized and questioned as to whether it is applicable in practice and can solve the challenges. Ward et al. (2016) argue that growth cannot be decoupled from environmental impacts and it is therefore misleading to use environmental policies that are growth-oriented. Efficient resource use has only a temporary effect, and GDP growth cannot
18 be decoupled from growth in energy use and resources in the longer run. In agreement, Hickel and Kallis (2020) mean that green growth and the required decoupling between GDP growth and resource use is difficult to achieve in practice, even with an optimistic view. As a result, international policies such as the Sustainable Development Goals (SDGs) should be reviewed (Hickel & Kallis, 2020).
3.2 Collaboration and Business Development
3.2.1 Open Innovation
The concept of open innovation was firstly described by Chesbrough (2003) in his book Open innovation: the new imperative for creating and profiting from technology. It is a strategy for leveraging internal and external knowledge and ideas to the market through different paths.
Chesbrough (2003) argues that companies need to be innovative and continuously utilize and create new products due to the rapidly changing world. As companies can no longer rely solely on internal ideas and resources to sustain and advance a business, it is necessary to go beyond the traditional notion that innovation is created and developed within the company. Hence, there must be greater cooperation between players in the market (Chesbrough, 2003).
Since the term was coined in 2003, it has grown rapidly and open innovation is now a well- known concept (Chesbrough, 2014). Because of increased research and new angles of approaches the definition has further evolved into “a distributed innovation process based on purposively managed knowledge flows across organizational boundaries, using pecuniary and non-pecuniary mechanisms in line with the organization’s business model” (Chesbrough, 2014, p. 17). Moreover, there are three different types of open innovation known as inbound, outbound, and coupled open innovation. The first type has gained the most attention in previous academic research and industry practice and refers to when a company exposes its innovation process and obtains knowledge from external actors. The purposive inflows of knowledge can be obtained through scouting, university research programs, funding start-up companies in the industry or other forms of collaborations. Contrarily, the second type of open innovation occurs when a company opens up for external organizations to use its business models and under- utilized assets. This type of knowledge flows includes out-licensing of technology and IT, spinouts, corporate venture capital, corporate incubators and joint ventures. Thirdly, coupled open innovation poses a combination of the two previously mentioned types. It includes a
19 minimum of two actors who share purposive inflows and outflows of knowledge between each other to further develop innovation (Chesbrough, 2014).
According to van de Vrande and Brunswicker (2014), much of the research on open innovation over the last decade has focused on large multinational firms, but it is at least as important for start-ups and SMEs. It is especially important from an economic perspective since the sector accounts for more than 90% of all business in Europe and creates many jobs. However, due to SMEs’ smallness, innovation in these companies has a natural external focus beyond the organizational boundaries. Open innovation can help SMEs to build legitimacy, and get access to critical resources and competencies that are lacking in their own management teams (van de Vrande & Brunswicker, 2014). Unlike large firms, open innovation in SMEs can create opportunities and meanwhile shape the future development of the firm. This is because open innovation in SMEs is closely linked to business strategy. According to Vanhaverbeke (2012), it is difficult for small companies to use open innovation without impacting the company’s strategic decisions and future objectives.
Furthermore, something van de Vrande & Brunswicker (2014) state as particularly noteworthy in previous research on SMEs and open innovation is the need for networks, which is an important driver of innovation. SMEs that use open innovation in terms of knowledge networks are more innovative than companies that do not. Moreover, the innovation process and knowledge networks in SMEs are more informal and the incentives are often regional, and can for example consist of collaborations between start-ups and venture capitalists, incubators, or experts (van de Vrande & Brunswicker, 2014).
3.3 Theoretical Framework
To understand the complexity regarding sustainability we need to examine it through a variety of theories. All of the above mentioned theories help us understand how and why Swedish business developers implement sustainability in their cooperation with start-ups. All the theories have been coded to see what elements within them that can explain how and why sustainability can be implemented. Together with the previous research, the theories are used as a tool to analyze the collected data presented in the empirical material and help us to deeper understand it.
20 Since all theories mentioned in this chapter contain elements that can be related to both how and why, a mix of them is used to analyze the empirical material. What can be noticed, however, is that the triple bottom line and green growth are mainly used to analyze how business developers implement sustainability in their cooperation with start-ups. Similarly, stakeholder and shareholder theory, creating shared value, and open innovation are more strongly connected to the why in the research question.
21 4 METHODOLOGY
The following chapter presents the methods and approaches that have been used in this study.
First, the study's research design, which is of a qualitative nature, is presented. This is followed by a section about the collection of data and sampling. The data was collected through semi- structured interviews with six business developers. To analyze the data, two levels of thematic coding was applied based on identified themes from the study’s interview guide and theoretical framework. The chapter ends with a discussion about our choices of methods and ethical considerations.
4.1 Research Design & Philosophical Approach
This study is qualitative and investigates a social reality, more specifically how and why people interpret a specific subject. The subject, in this case, is sustainability in the relationship between start-ups and business developers. A qualitative approach “has rejected the practices and norms of the natural scientific model and of positivism in particular in preference for an emphasis on the way in which individuals interpret their social world” (Bryman & Bell, 2011, p. 16). The most common approaches in qualitative research, which also was used in this study, are constructivism for the ontological perspective and interpretivism for the epistemological perspective (Bryman & Bell, 2011). When studying social science, the subject and a person’s view upon things are most important. A person gains knowledge in connection with their surroundings and is shaping his or her own reality, the reality is not there by itself. For example, what is sustainable is not something that is set and determined. What is sustainable is something that every one of us has its own interpretation of. Therefore, the constructivist and interpretivist approach were chosen for this study.
Furthermore, an inductive approach was chosen due to the purpose and research question. An inductive approach shows the relation between theory and collected data, where the latter set up the foundation for the former (Bryman & Bell, 2011). This was considered the most appropriate approach for this study since we did not want to decide beforehand what the companies considered to be sustainable. Instead, we wanted the data to form how and why business developers implement sustainability in their cooperation with start-ups. Based on this, we let the collected data control and lay the foundation for the theory. Further, the study used a comparative design with multiple cases. A comparative design is applied when the researcher is using the same method to examine two or more cases (Bryman & Bell, 2011). We found that
22 the previous literature only examined one type of business developers. Hence, it could be considered to be a gap in the literature regarding including different types of business developers in the same study. Therefore, a comparative design with multiple cases in terms of incubators, financiers, and advisors was considered to be appropriate and valuable to contribute to the field of research.
4.2 Data Collection
The data has been collected through qualitative semi-structured interviews. In qualitative interviews, it is often encouraged to go beyond the interview guide and ask follow up questions depending on the interviewee’s answers. As a result of this, qualitative interviews tend to be more flexible and the researcher aims for detailed answers (Bryman, 2016). This study aims to get an understanding of how and why business developers implement sustainability in their cooperation with start-ups. Hence, deeper answers were desired rather than short measurable ones and, therefore, qualitative interviewing was chosen as the method for data collection.
4.2.1 Sampling
Since the purpose includes investigating different types of business developers, the selection of interviewees was done strategically. The interviews were divided into three different categories of business developers which were: incubators, financiers, and advisors.
Furthermore, the selection of business developers can be explained as purposive sampling, which occurs when the selection of units has a clear connection to the chosen research question (Bryman, 2016). When reading the research question in this study one can assume that business developers is the area of interest and hence, strongly linked to the sample. Furthermore, purposive sampling is a broad concept that consists of several more specific subcategories. In this study, a typical case sampling is used because the business developers exemplify a dimension of interest (Patton, 1990; Palys, 2008 in Bryman, 2016).
Why these six business developers were selected was because of their quick response and availability. We contacted a total of ten business developers through email. Of those ten, these six answered first. In connection with the initial email contact, the date and time for the interview were determined. We had not decided in advance that six interviews were enough, it was done gradually after we had held the interviews. After these six interviews were held, the material was considered sufficient. We, therefore, choose not to have more interviews after this
23 stage. We chose to take those who responded first because it was considered to be the most time-efficient. Furthermore, smaller parts of snowball sampling were also used. This means that we contacted people we became aware of through already sampled participants (Bryman, 2016). Within the field of business developers and start-ups, networking is common. By using the snowball sampling technique, we got in contact with other participants with relevant knowledge and characteristics that were considered to be beneficial to the study. Table 1 gives an overview of the held interviews, see below.
Table 1: Overview of respondents and interviews.
Company Type of Business Developer
Date of
interview Time Digital or Face-to-face
Science Park Gotland Incubator March 18 2021 40 mins Face-to-face Dalarna Science Park Incubator April 13 2021 40 mins Digital
Vinnova Financier April 14 2021 41 mins Digital
Almi Invest Financier April 15 2021 54 mins Digital
Drivhuset Advisor April 16 2021 38 mins Digital
Almi Business Partner Advisor April 19 2021 46 mins Digital
4.2.2 Conducting Qualitative Interviews
To ensure that the interviews would give us material in line with our research question, an interview guide was established. Since the semi-structured interview type is more flexible, the questions in the interview guide were used more as guidelines. Also, the semi-structured type allows the researchers to ask the questions in a different order and ask follow-up questions (Bryman, 2016). The interview guide can be found in appendix 1. Likewise, the quotes in their original language, Swedish, can be found in appendix 2. In the empirical chapter, the quotes are numbered from one to 23.
According to Bryman and Bell (2011), conducting interviews through a physical meeting is commonly used in qualitative research since it increases credibility and makes it possible to observe the body language of the interviewee. In this study, it varied since the companies are
24 located in different parts of Sweden. One of the interviews was held face-to-face, in Visby, but the other five was conducted through the video conferencing service Zoom. The COVID-19 pandemic complicated the possibility of a physical meeting as one should not travel unnecessarily. Although face-to-face interviews are preferred, digital interviews have certain advantages. For example, it is more flexible, time-efficient, and it can also enable detailed and thoughtful answers (Bryman, 2016).
Both of the authors in this study participated in all interviews, but with different roles. One was responsible for asking questions while the other person had a more passive role and was hence responsible for taking notes and making sure that nothing was missed. To facilitate the transcription and later analysis of what had been said in the interview, it was audio-recorded.
Directly after the interviews were held, we wrote down some notes to remember impressions and thoughts that would not be possible to notice in the transcription.
4.3 Data Analysis
The collected material has been coded in two levels. The first coding was done for the presentation of the empirics in chapter 5. In this first step, the material was coded in different colors according to themes from the interview guide. The themes revolve around the topics:
general information about the business development firm, cooperation with start-ups, internal view on sustainability and growth, and advising, or funding, in sustainability. The second level of coding aimed to find connections between the study’s empirical data and theoretical background, and hence clarify the answer to the research question. Therefore, we reviewed the material and related it to selected themes established from our theoretical framework. The themes we were looking for in the second level coding were linked to specific “how’s” and
“why’s” that we could find in the different theories. Thereafter, we coded our collected data according to these themes. To avoid missing something interesting, we looked through the transcripts one more time after the analysis was written.
However, to facilitate the presentation of our analysis it has been structured according to the factors how and why, and divided by the type of business developer. Through this division, we were able to see connections, and further draw conclusions and answer our research question.
A coding scheme based on different colors for each theme has been set up for both levels of coding.
25 4.4 Method Discussion
There are a few things with the chosen methods in this study that need to be further discussed.
First, the comparative design does not fully represent the design we aim to do. A comparative design examines different cases with the same method (Bryman & Bell, 2011). However, the main aim of this study was not to investigate the explicit similarities and differences between the cases. The choice to investigate several business developers was made to build a stronger argument and get a broader understanding of our investigated phenomenon. Therefore, the multiple form seemed to be the most suitable design for this study.
According to Bryman and Bell (2011), there are four main elements of ethical dilemmas when doing business research: harm to participants, lack of informed consent, invasion of privacy, and deception. In this study, the first two elements are of the most importance. Regarding harm to participants, Bryman and Bell (2011) state that the topic of anonymity is of high priority.
The identity and organization should be kept secret and this topic must be discussed with the interviewees. In our case, we asked the respondents if it was okay for them that we used the name of the company in the thesis. It was not considered necessary to include the names of the respondents or the person’s specific role. Moreover, in regards to the dilemma of consent and lack of informed consent, Bryman and Bell (2011) mention recording and highlight the importance of informing the respondents that the interviews will be recorded. Therefore, before each interview started, we asked the respondents for consent to record the interviews.
As mentioned, qualitative semi-structured interviews were used to collect the data in this study.
This was considered most appropriate since it provided an opportunity for in-depth answers from the business developers that could not be obtained to the same extent in, for example, a survey. However, there are some limitations to the chosen method. As we only interviewed one person per organization, there is a risk that the respondent’s view of sustainability characterized the answers, even though the questions were asked from an organization perspective.
Furthermore, sustainability can be considered a complex topic. For many companies, it is important to be seen as good as possible, and to be seen as a sustainable company can be a part of that. The purpose of this study was not to judge the business developers. Instead, the study aimed to see how and why business developers implement sustainability in their cooperation with start-ups and, hence, not to say if they are doing it right or wrong.
26 5 EMPIRICAL RESULT
In the following chapter, the study’s empirical material is presented. As mentioned, the material was collected from interviews with different types of business developers, and it is also presented based on the three categories: incubators, financiers, and advisors. The material is presented separately for the different cases. The presented empirics focus on the business developers work with and views on sustainability, but a brief introduction to the companies is also given.
5.1 Incubators
5.1.1 Science Park Gotland
Science Park Gotland (SPG) is an incubator situated inside the university building in Visby.
SPG has six employees doing a variety of work from administration and communication to business development. Besides, the incubator has a subsidiary focused solely on investments called RegionInvest (Science Park Gotland, 18 March, 2021). The investment company is financed by the region of Gotland and the insurance company Länsförsäkringar, and SPG is financed by Uppsala University, the region of Gotland, the state agency Tillväxtverket and the European Union. SPG has a specific mission which is to promote the regional businesses on Gotland. Moreover, the incubator also promotes innovation, sustainability, and scalability (Science Park Gotland, 18 March, 2021; Science Park Gotland, n.d.).
The incubator offers two different programs. The first is called SPG-Startup and stretches over six months. It focuses on helping entrepreneurs with their early ideas and business plans. The second program, SPG-Summit, can last for up to two years and is only for companies that have already finished SPG-Startup. The most common reason for SPG to reject a start-up is either because they do not have a well-functioning team, or that the idea lacks scalability. Sometimes, SPG recommends entrepreneurs to visit another type of business developer, like Almi Business Partner. Furthermore, what SPG offers the start-ups more specifically, are the four keywords:
“competence, finance, office space, and connections” (Authors’ translation, quote 1). SPG’s work is to serve the companies and entrepreneurs, the incubator sees them as its customers. In regards to finance, SPG has a close relationship with its subsidiary, RegionInvest, which can help with different kinds of investment. RegionInvest relies on the funded start-ups to get economic growth. Further, when RegionInvest makes an exit and sells its share, the profit can
27 be invested in other start-ups, and the process starts over. RegionInvest does not have any other demands on the start-up than the ones SPG has in the sense of sustainability, scalability, and innovation (Science Park Gotland, 18 March, 2021).
According to SPG, the definition of growth is that start-ups need to have the potential to grow and that potential needs to be as big as possible. The incubator sees a problem with growth which is that there is a big difference between running a small start-up compared to running a bigger company with more employees. But at that stage, SPG is no longer involved. The incubator defines sustainability as something big and holistic, it is about taking responsibility both as companies and as individuals. SPG also defines it as something that correlates with the SDGs. In regards to sustainability in the work with start-ups, the incubator sees it as something important. “You need to have a sustainability aspect and that is why a lot of the companies that come here already have it in their business model” (Authors’ translation, quote 2). According to SPG, the start-ups can not only focus on sustainability-related to their product, they need to focus on themselves as well. For example, SPG has an internal travel policy, a sustainability policy or if they consider how they travel to their meetings, for example by boat or airplane.
Moreover, the start-ups should be aware of how their subcontractors work with sustainability.
For SPG, it is important to advise the start-ups on sustainability because a start-up most likely needs to focus on something else in the beginning, for example, getting its product out on the market or finding funding. In that stage, SPG has the role to guide the start-up in the right direction (Science Park Gotland, 18 March, 2021).
5.1.2 Dalarna Science Park
Dalarna Science Park (DSP) founded its incubator in 2004. The incubator’s mission is to promote regional entrepreneurship by supporting start-ups that are innovative, scalable, contribute to sustainability, and have growth potential. Moreover, its role as an incubator is to help companies develop faster than they would have done on their own. Furthermore, DSP has a broad target group of entrepreneurs with different backgrounds and business ideas, but for them to start a cooperation, there must be a height for innovation and growth potential. The values that characterize DSP are open, generous, and curious, and the incubator works to create new encounters between people who can change the world (Dalarna Science Park, 13 April, 2021).
28 All start-ups that contact DSP undergoes a test to check that the above-mentioned requirements are met. DSP also examines the team behind the business idea. The companies that go further are matched with internal and external business coaches and are thereafter offered advice in many different areas such as legal processes, sustainability and intellectual property rights. The start-ups also have the opportunity to use DSP’s co-working space. In terms of funding, DSP has just started a subsidiary, DalaCapital, where the start-ups can apply for seed funding.
However, the incubator also advises its start-ups in finding other sources of funding. An example mentioned in the interview is Vinnova (Dalarna Science Park, 13 April, 2021).
According to DSP, there is a conflict in that the concept of growth is often associated with solely economic profitability:
It is obvious that there must be profitability to be able to run a company, otherwise, it will not work at all. But sometimes, the very basic idea, you may have a social innovation, you may be driven by other values than to just make money. (Authors’
translation, quote 3)
Sustainability is something that permeates everything at DSP. The incubator works according to the definition in the Brundtland Report (1987), as well as with social, environmental, and economic sustainability in mind. DSP believes that its biggest impact, from a sustainability point of view, is in advising and educating the companies the incubator works with. DSP also has an internal sustainability council with representatives from the company's various functions. The council has developed a climate-adapted travel policy, a sustainability strategy, and a checklist for sustainable events. DSP has also participated in competitions to improve its work with sustainability.
In DSP’s advising to start-ups, sustainability is something recurring. The incubator educates in the subject through workshops and has, together with some other incubator firms, developed a new system called Sustainability Scale-Up. The purpose of the system is to “Identify which areas of sustainability that are most relevant to the companies and where they make the biggest impact.” (Authors’ translation, quote 4). The system is based on Agenda 2030 and ISO 26000 and deals with various aspects of environmental and social sustainability. The start-ups identify their customers’ interests, as well as the interests of society at large. An important part is to set clear goals and do regular follow-ups (Dalarna Science Park, 13 April, 2021).
29 DSP wants to reach out to start-ups with sustainable innovations and believes that they inspire others. “It creates rings on the water, everyone needs to talk about sustainability today to inspire others as well.” (Authors’ translation, quote 5). The incubator gets many benefits by collaborating with start-ups, for example, a bigger network and new experiences which they can use in future collaborations with other start-ups (Dalarna Science Park, 13 April, 2021).
5.2 Financiers
5.2.1 Vinnova
Vinnova is the state agency of innovation in Sweden and was formed 20 years ago. Its mission is to “Promote sustainable growth by funding needs-driven research and strengthening innovation systems.” (Authors’ translation, quote 6). The authority has two different elements, (1) funding to research projects within academia, through Swedish universities, and (2) funding innovation projects within the corporate world. According to Vinnova (April 14, 2021), they are: “Without competition, Sweden’s largest financier of small businesses. It differs from year to year, but we distribute about 200-300 million SEK every year in grants to start-ups”
(Authors’ translation, quote 7).
Currently, Vinnova only offers funding, but the financier has plans on starting with other services, like consulting or coaching. In that case, it would probably be done through a collaboration with external firms. Furthermore, Vinnova has two specific announcements aimed for innovative start-ups. “What we are looking for is an idea with a high potential, but the risk in the project is so high that no one else dares to invest.” (Authors’ translation, quote 8). In addition, two other criteria concerning sustainability and gender equality must be met:
Then we have a requirement for sustainability because it is money from tax funds that finance it. [...] we assess how well they argue on how to solve one of the challenges in Agenda 2030, the global goals you know. [...] But there are no problems, everything falls within this. Agenda 2030, the 17 global goals are so broad that it is okay. Then we also have a requirement that it should be equal. But, we do not count heads at Vinnova.
[...] What we assess is the quality of a gender equality strategy we have. It may be that the team should be equal, it may also be that men and women have an equal chance to influence the development of the project, and men and women have an equal chance to
30 take part in the results. It may also be that the project itself increases gender equality in society. (Authors’ translation, quote 9)
Furthermore, the respondent describes why they have gender equality as a criterion:
The reason is not that it is political in itself, but the reason is that research since the 60s, at least, shows that heterogeneous, mixed teams have much better prerequisites to make more qualified decisions than homogeneous teams. [...] that is why we have this criterion because we know that it is important for the success of the company in the long run. (Authors’ translation, quote 10)
According to Vinnova (14 April, 2021), other aspects than economic growth are important:
“We fund projects that do not necessarily provide economic growth. Sustainable growth can be environmentally sustainable, it can be socially sustainable, then health is included.”
(Authors’ translation, quote 11). Furthermore, the state agency has the ambition to be sustainable and work to ensure that it is a standard that permeates the entire organization, but it is not something Vinnova actively communicate:
We have been working with Agenda 2030 for so long that it, like you, does not even have to discuss it anymore. And we also notice it in companies that apply, we do not even have to explain why they should have a strategy towards Agenda 2030. It is "a non-issue". We do not even get the question anymore, so, therefore, you do not have to say that you are [sustainable]. (Authors’ translation, quote 12)
5.2.2 Almi Invest
Almi Invest started as a test project from Brussel but is now a part of Almi Business Partner Group. The investor has 50 employees spread across Sweden and invests in various kinds of start-ups. Often, the financier invests between two and ten million SEK for each investment.
By investing in a start-up, Almi Invest becomes a shareholder and will most likely take a position on the board. However, the financier aims to do an exit at some point, but it often takes around ten years before it happens. The reason for Almi Invest to do an exit is to make its fund grow bigger, and enable further investments in other companies:
31 Right now we are in our second fund and we do not think that we will get funding for a third one. For us, it is important to do an exit, and the exit needs to be profitable.
(Authors’ translation, quote 13)
Almi Invest communicates with the start-ups regularly, often several times a week, because they are board members. Almi Invest does not have many targets or set goals for the start-ups with who they cooperate. However, the owners of the start-ups should be dedicated to continuing working in the company. One of Almi Invest’s biggest risks is if the start-up goes bankrupt, and the reason behind it is often that the team cannot collaborate and work together.
According to Almi Invest, they invest in the people, not the company. The financier has even turned down investments due to the team (Almi Invest, 15 April, 2021).
Sustainability is something Almi Invest looks for when investing in a start-up. According to Almi, sustainability is about three parts: economical, social and environmental. Moreover, Almi Invest sets up sustainability reports on the start-ups they want to invest in. Questions the start-ups need to answer in the application process are if the companies have any operations that could harm the environment, and who the start-ups’ customers are. Furthermore, something Almi Invest feels concerned about is the social part of sustainability. According to Almi Invest, a report stated that, in general, only 10% of invested capital goes to female start- ups, and for Almi Invest that number is around 30% which, they consider is still bad. However, the investor cannot invest in start-ups just because the start-ups are being operated by females due to Almi Invest being funded with tax money, but it is something that is discussed. The respondent says: “For us, this is a very important aspect of sustainability, to create more female entrepreneurship, and try to help them as best we can” (Authors’ translation, quote 14). Further, when discussing how to solve the problem with unbalance between male and female entrepreneurship, the respondent says: “Here, you need to think long-term, how we should change this, because it is not sustainable.” (Authors’ translation, quote 15).
Another thing addressed by Almi Invest when talking about sustainability is that the climate between them and the start-ups needs to be sustainable: “That is a part of sustainability, that we must be able to trust each other, otherwise it will not work” (Authors’ translation, quote 16).
