Financing green innovation startups: a systematic literature review on early-stage SME funding
Article
Mukherjee, A., Owen, R., Scott, J.M. and Lyon, F. 2024. Financing green innovation startups: a systematic literature review on early-stage SME funding. Venture Capital. https://doi.org/10.1080/13691066.2024.2410730
| Type | Article |
|---|---|
| Title | Financing green innovation startups: a systematic literature review on early-stage SME funding |
| Authors | Mukherjee, A., Owen, R., Scott, J.M. and Lyon, F. |
| Abstract | This paper investigates the critical issue of financing early-stage green startups, examining the types of investors and finance models available, the challenges these startups face, and how the green finance ecosystem can better support early-stage investment. Utilizing a systematic literature review (SLR) methodology, we provide a comprehensive analysis of the current landscape. Our findings reveal a significant paucity of data and a bias towards well-established North American and European ecosystems, while highlighting an emerging diversity in private finance sources post-Global financial crisis (GFC), including grants, equity, and crowdfunding. Despite this, there remains a heavy reliance on public funding and a lack of evidence regarding its impact. The inherent characteristics of cleantech – high capital expenditure, long investment horizons, and disruptive nature – necessitate innovative public financing instruments and policies to reduce risk and attract private investment. Our theoretical contribution highlights the necessity for interdisciplinary research and policy collaboration to develop a holistic entrepreneurial finance (entfin) ecosystem. This approach should integrate quantitative economic and qualitative behavioural finance research to address information asymmetries and improve the green economy policy mix. Such a framework will support public-private co-financing, enhance stakeholder engagement, and provide evidence for policy decisions, facilitating more rapid commercialization of cleantech innovations for environmental sustainability. |
| Keywords | green innovation; SME; early-stage innovation; cleantech; policy; research agenda |
| Sustainable Development Goals | 13 Climate action |
| Middlesex University Theme | Sustainability |
| Research Group | Centre for Enterprise, Environment and Development Research (CEEDR) |
| Publisher | Taylor & Francis (Routledge) |
| Journal | Venture Capital |
| ISSN | 1369-1066 |
| Electronic | 1464-5343 |
| Publication dates | |
| Online | 03 Oct 2024 |
| Publication process dates | |
| Submitted | 27 Jun 2024 |
| Accepted | 24 Sep 2024 |
| Deposited | 05 Nov 2024 |
| Output status | Published |
| Publisher's version | License File Access Level Open |
| Copyright Statement | © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. |
| Digital Object Identifier (DOI) | https://doi.org/10.1080/13691066.2024.2410730 |
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