Green signals of new ventures: investigating the impact of environmental orientation on funding and the moderating role of lead venture capitalists

Verena Hossnofsky (), Patrick-Peter Herold, Franziska Schlichte and Sebastian Junge
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Verena Hossnofsky: Friedrich-Alexander-Universität Erlangen-Nürnberg
Patrick-Peter Herold: Friedrich-Alexander-Universität Erlangen-Nürnberg
Franziska Schlichte: Friedrich-Alexander-Universität Erlangen-Nürnberg
Sebastian Junge: Friedrich-Alexander-Universität Erlangen-Nürnberg

Small Business Economics, 2025, vol. 65, issue 3, No 24, 1810 pages

Abstract: Abstract Drawing on signaling theory, this study investigates whether the environmental orientation of new ventures serves as an important signal related to funding outcomes. Analyzing a dataset of 2003 funding rounds completed in the U.S. during 2022, our findings reveal that the environmental orientation of a new venture positively influences pre-IPO funding outcomes. Furthermore, this effect is positively moderated by the prominence of lead venture capital investors. Our post hoc analysis offers a valuable temporal perspective and suggests that our findings generalize across both early-stage and late-stage funding rounds, but not seed funding. This study contributes to the literature on financial resource acquisition and signaling theory, and also offers valuable implications for practitioners, helping them navigate the competitive funding environment more effectively.

Keywords: Entrepreneurs; Funding; New ventures (search for similar items in EconPapers)
JEL-codes: G24 L26 M13 Q56 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11187-025-01072-9

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