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Impact investing and sustainable market transformations: The role of venture capital funds

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  • Maarten Holtslag
  • Nicolas Chevrollier
  • Andre Nijhof

Abstract

Impact investors often know their financial return on investments, but are less certain about their impact. This article frames impact as their contribution to sustainable market transformation. A sustainable market transformation consists of inception, first movers, critical mass, and institutionalization phases. Given the nature of such transformations, the impact is effectuated at different moments and toward various market actors. Based on an exploratory research design with semi‐structured expert interviews, this article aims to create an overview of the roles of impact venture capital funds in sustainable market transformations. The results suggest that the view that the capitalization of start‐ups is the only impact of impact investors is a misconception. The needs of companies with sustainability value propositions change over time and consequently impact investors perform various roles. For example, exiting an investment while upholding social and environmental objectives communicates to mainstream business that the start‐up is ready to create a greater impact. Further, impact investors fulfill external roles that change the perspectives of institutional actors toward sustainable investments. Based on an overview of the different roles that impact investors fill, this article proposes a future research agenda to strengthen our knowledge about the impact return of investments.

Suggested Citation

  • Maarten Holtslag & Nicolas Chevrollier & Andre Nijhof, 2021. "Impact investing and sustainable market transformations: The role of venture capital funds," Business Ethics, the Environment & Responsibility, John Wiley & Sons, Ltd., vol. 30(4), pages 522-537, October.
    • Handle: RePEc:wly:buseth:v:30:y:2021:i:4:p:522-537
    DOI: 10.1111/beer.12371
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    References listed on IDEAS

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    Cited by:

    1. Ragasa, Catherine & Spielman, David & Lynam, John, 2025. "Agricultural innovation frames, policies, and instruments: evolution, lessons, and future research," Food Policy, Elsevier, vol. 137(C).
    2. Monica Singhania & Deepika Swami, 2024. "Impact investing: Scientometric review and research agenda," Business Ethics, the Environment & Responsibility, John Wiley & Sons, Ltd., vol. 33(3), pages 251-286, July.
    3. Emmanuelle Dubocage, 2026. "L’investissement à impact : entre promesse transformative et tensions structurelles," Post-Print hal-05581313, HAL.
    4. Emanuela Giacomini & Nicoletta Marinelli & Luca Riccetti, 2023. "The impact at stake: Risk and return in publicly listed social impact firms," Business Ethics, the Environment & Responsibility, John Wiley & Sons, Ltd., vol. 32(2), pages 713-741, April.
    5. Ramzi Benkraiem & Emmanuelle Dubocage & Bouchra Mzali, 2026. "Impact Investing as A Driver of Innovation: Governance Transformation and Sustainable Entrepreneurship," Post-Print hal-05531936, HAL.

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