Shifting Capital Toward Sustainable Business Models: How Entrepreneurial Stories Resonate with Impact Investors

In impact investing, there is a tension between the expected financial return on investment (ROI) and the positive benefits to society (impact) of a particular investment. Balancing ROI and impact is a persistent challenge for impact investors as they scale up and support the ecological transition. Conversely, sustainable entrepreneurs engaged in this transition seek to position themselves for impact investment by crafting stories that resonate with impact investors. The theory of cultural entrepreneurship provides a lens through which to understand this process. By applying this theory to the ROI-impact balancing decision, this qualitative study advances the theoretical understanding of what leads to resonance in an investment context through interviews with impact investors. The study has practical relevance by articulating a framework for the ROI-impact balancing decision that can be useful to impact asset owners and managers.