‘De facto’ responsible innovation in early-stage ventures: the reinforcing role of impact investors

Though much attention has been paid to the intentional adoption of Responsible Innovation (RI), the drivers of de facto RI (responsible innovation framed through organisations' existing practices, independent of RI principles) remain underexplored. We investigate the influence of social/environmentally oriented (impact) investors on early-stage business ventures whose innovation practices align with RI principles, despite their being unaware of RI discourse. Based on our study of a social finance-practising venture capital fund, its portfolio ventures, investors and peers, we illustrate a process model that captures impact investors' reinforcing influence on de facto RI practices among ventures they fund. We theorise that the selection, incentive and accountability systems deployed by impact investors serve to align the financial and non-financial interests of innovation value chain actors, creating conditions that promote and enable ventures' simultaneous pursuit of commercial and social/environmental performance.