The Rationality and Irrationality of Financing Green Start-Ups
Green start-ups contribute towards a transition to a more sustainable economy by developing sustainable and environmentally friendly innovation and bringing it to the market. Due to specific product/service characteristics, entrepreneurial motivation and company strategies that might differ from tha...
| Main Author: | |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2015-11-01
|
| Series: | Administrative Sciences |
| Subjects: | |
| Online Access: | http://www.mdpi.com/2076-3387/5/4/260 |
| _version_ | 1819127388087255040 |
|---|---|
| author | Linda Bergset |
| author_facet | Linda Bergset |
| author_sort | Linda Bergset |
| collection | DOAJ |
| description | Green start-ups contribute towards a transition to a more sustainable economy by developing sustainable and environmentally friendly innovation and bringing it to the market. Due to specific product/service characteristics, entrepreneurial motivation and company strategies that might differ from that of other start-ups, these companies might struggle even more than usual with access to finance in the early stages. This conceptual paper seeks to explain these challenges through the theoretical lenses of entrepreneurial finance and behavioural finance. While entrepreneurial finance theory contributes to a partial understanding of green start-up finance, behavioural finance is able to solve a remaining explanatory deficit produced by entrepreneurial finance theory. Although some behavioural finance theorists are suggesting that the current understanding of economic rationality underlying behavioural finance research is inadequate, most scholars have not yet challenged these assumptions, which constrict a comprehensive and realistic description of the reality of entrepreneurial finance in green start-ups. The aim of the paper is thus, first, to explore the specifics of entrepreneurial finance in green start-ups and, second, to demonstrate the need for a more up-to-date conception of rationality in behavioural finance theory in order to enable realistic empirical research in this field. |
| first_indexed | 2024-12-22T08:11:08Z |
| format | Article |
| id | doaj.art-226bb0ad3ddf4a5d8cac7924c62bd4a9 |
| institution | Directory Open Access Journal |
| issn | 2076-3387 |
| language | English |
| last_indexed | 2024-12-22T08:11:08Z |
| publishDate | 2015-11-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Administrative Sciences |
| spelling | doaj.art-226bb0ad3ddf4a5d8cac7924c62bd4a92022-12-21T18:33:00ZengMDPI AGAdministrative Sciences2076-33872015-11-015426028510.3390/admsci5040260admsci5040260The Rationality and Irrationality of Financing Green Start-UpsLinda Bergset0Department of Business Administration, Economics and Law, Institute of Business Administration and Business Education, Carl von Ossietzky University Oldenburg, Ammerländer Heerstr 114-118, DE-26129 Oldenburg, GermanyGreen start-ups contribute towards a transition to a more sustainable economy by developing sustainable and environmentally friendly innovation and bringing it to the market. Due to specific product/service characteristics, entrepreneurial motivation and company strategies that might differ from that of other start-ups, these companies might struggle even more than usual with access to finance in the early stages. This conceptual paper seeks to explain these challenges through the theoretical lenses of entrepreneurial finance and behavioural finance. While entrepreneurial finance theory contributes to a partial understanding of green start-up finance, behavioural finance is able to solve a remaining explanatory deficit produced by entrepreneurial finance theory. Although some behavioural finance theorists are suggesting that the current understanding of economic rationality underlying behavioural finance research is inadequate, most scholars have not yet challenged these assumptions, which constrict a comprehensive and realistic description of the reality of entrepreneurial finance in green start-ups. The aim of the paper is thus, first, to explore the specifics of entrepreneurial finance in green start-ups and, second, to demonstrate the need for a more up-to-date conception of rationality in behavioural finance theory in order to enable realistic empirical research in this field.http://www.mdpi.com/2076-3387/5/4/260greenenvironmentalsustainableentrepreneurshipstart-upentrepreneurial financebehavioural/behavioral financerationalityventure capitalbusiness angels |
| spellingShingle | Linda Bergset The Rationality and Irrationality of Financing Green Start-Ups Administrative Sciences green environmental sustainable entrepreneurship start-up entrepreneurial finance behavioural/behavioral finance rationality venture capital business angels |
| title | The Rationality and Irrationality of Financing Green Start-Ups |
| title_full | The Rationality and Irrationality of Financing Green Start-Ups |
| title_fullStr | The Rationality and Irrationality of Financing Green Start-Ups |
| title_full_unstemmed | The Rationality and Irrationality of Financing Green Start-Ups |
| title_short | The Rationality and Irrationality of Financing Green Start-Ups |
| title_sort | rationality and irrationality of financing green start ups |
| topic | green environmental sustainable entrepreneurship start-up entrepreneurial finance behavioural/behavioral finance rationality venture capital business angels |
| url | http://www.mdpi.com/2076-3387/5/4/260 |
| work_keys_str_mv | AT lindabergset therationalityandirrationalityoffinancinggreenstartups AT lindabergset rationalityandirrationalityoffinancinggreenstartups |