Hybrid Governance in Indonesia’s Startup Ecosystem: Balancing Local Law, International Practices, and Innovation

Abstract This article examines a hybrid model of startup governance emerging in Indonesia, Southeast Asia’s largest economy. While existing scholarship has largely focused on the US venture capital paradigm, Indonesia offers an alternative model that blends transactional legal structures with domestic institutional arrangements and a collaborative regulatory environment. Drawing on twenty-four original semi-structured interviews with Indonesian startup founders and investors, the article identifies three defining features of this hybrid model: the widespread use of Singapore-based holding companies paired with Indonesian operating entities; the central role of state-owned enterprises, family conglomerates, and government-affiliated funds; and a cooperative approach to regulatory engagement that contrasts with the adversarial stance adopted in the US. These elements have enabled rapid startup growth but have also produced governance vulnerabilities. Case studies of eFishery and TaniHub illustrate how weak internal controls, blurred governance responsibilities, and misaligned stakeholder incentives can generate strategic failures. The article makes four main contributions to comparative corporate governance: it introduces a novel model of Indonesian startup governance as an alternative to US-based ones; offers a rare account of governance practices in an emerging market; reconceptualises regulatory entrepreneurship in contexts of legal pluralism and state-market interdependence; and demonstrates how legal transplants are implemented in practice.