Othmar Manfred Lehner

Crowdfunding Social Ventures: A Model and Research Agenda

Crowdfunding (CF) in a social entrepreneurship context is praised in narrations for its multifaceted potential - to access much needed financial resources, to gain legitimacy through crowd participation, and to further tap the crowd as a resource for numerous activities of the venture. From an academic point of view however, little has been written about CF as a whole, and inquiries from the social entrepreneurship sphere are so far mostly concerned with CF donations. In order to overcome the scarcity of the resource ‘crowd’ being asked for gifts, new approaches, including tailored reward systems, more structured bond-like investments and equity based CF are experimented with. Finance literature scarcely addresses these new forms, and no article so far shows concern for the idiosyncrasies of social ventures and the differing rationale of the social entrepreneurs and investors in CF activities. This paper thus sets out to first review existing literature on financing social ventures as well as on crowdfunding. Based upon the findings, the author subsequently draws up an early scheme of CF in order to structure future inquiries and to provide a common ground for discussion. Based upon the two streams, and in reflection to perspectives from traditional finance, a research agenda of eight themes for CF of social ventures is set up. The themes proposed are: investor types and utility-functions; corporate governance and structure in CF ventures; investor relations, risk and disclosure; applications and comparative approaches; network tie formation; legitimacy, institutions and democracy; challenging finance metrics; and legal and regulative hurdles for equity and debt CF.

Social finance and crowdfunding for social enterprises: a public–private case study providing legitimacy and leverage

The authors work closely with academia and governmental organizations in the UK and abroad to develop new, innovative schemes for social impact investing. Such schemes include considerations for public–private collaborations, legislative actions, and especially in this case, for the leveraged use of public and philanthropic funds in Crowdfunding (CF). The relatively new phenomenon of CF can not only provide necessary funds for the social enterprises, it may also lead to a higher legitimacy of these through early societal interaction and participation. This legitimacy can be understood as a strong positive signal for further investors. Governmental tax-reliefs and guarantees from venture-philanthropic funds provide additional incentives for investment and endorse future scaling by leveraging additional debt-finance from specialized social banks. This case study identifies idiosyncratic hurdles to why an efficient social finance market has yet to be created and examines a schema as a case of how individual players’ strengths and weaknesses can be balanced out by a concerted action. The paper discusses the necessary actions, benefits and implications for the involved actors from the public, private and third sector.

Opportunity Recognition in Social Entrepreneurship A Thematic Meta Analysis

Opportunity recognition (OR) is at the very heart of entrepreneurship. However, research on OR in the context of social entrepreneurship is still in its early stages. First, this article identifies, codifies and analyses OR-relevant articles on social entrepreneurship (SE) through the lens of Sarasvathy’s three views of entrepreneurial opportunity recognition. In the second step, statistical methods are applied on the results to indicate possible correlations among different schools of thought in SE and views on OR. OR in social ventures is found to be a prevalent topic in SE literature and differences in OR between social and commercial ventures are found.

Pre-Paradigmatic Status of Social Entrepreneurship Research: A Systematic Literature Review

Abstract Social entrepreneurship (SE) research has been presented in the literature as a field of action in a pre-paradigmatic state, a field that lacks an established epistemology. Despite that impediment, several qualitative and quantitative studies have already been undertaken on the sole base of some institutions’ worldview and without previous solidification of theory. Consequently, critics and social constructivists have found much ambivalence in these and owing to the resulting mess, even question SEs legitimization as a distinctive item of research. Articles on the topic of SE make use of a variety of frameworks, borrowing from neo-institutional or dialectic theory, bringing with them different research methods and views from other disciplines. Instead of proposing another conceptual approach and yet contributing to the ongoing discussion, the authors enact on a deductive journey by examining and clustering underlying paradigmatic assumptions found in a large-scale sample (>300) of current articles. In comparison to results from the management (entrepreneurship) literature, the study finds statistical evidence to the hypotheses that SE differs in researchers’ paradigms, that seminal SE research transcends the foci on either detached structures or individuals, and that research in SE is often led by advocacy worldviews of the researchers themselves.

Entrepreneurial implications of crowdfunding as alternative funding source for innovations

Crowdfunding (CF) is a form of early-stage financing for innovative ventures, which has seen tremendous growth in the past few years – partly because it provides a desperately needed alternative to the scarcity of traditional sources of finance during the so called ‘credit crunch’. CF ranges from a simple form of pre-financing to full grown debt or equity investments, but they are typically small pledges that can add up to incredible amounts. Scholarly literature has only started to examine CF and is still in an early stage when it comes to identifying implications for entrepreneurs apart from often over-simplified anecdotal evidence of success. The authors argue that CF can by no means be seen from a financial perspective only, rather it needs to be addressed as a bundle of processes leading to innovative entrepreneurial business-models. This qualitative study explores four extreme cases from the information and communications technology sphere to find out non-financial implications of CF as alternative funding source for innovative entrepreneurs and their business models.

Opening the Market for Impact Investments: The Need for Adapted Portfolio Tools

Social and environmental impact investing as an activity as well as a concept has grown in recognition on a truly global scale. Yet, apart from anecdotal success stories of some specialized forms such as social-impact bonds, little is known about the field and the complex interplay between agents, instruments and regulations. Neither the rationales of the various participants in the field, nor the evaluation criteria for some of its instruments have been scrutinized in-depth so far. Especially the important constructs of risk and returns from a financial as well as a social impact perspective have so far been used in differing fashions, thus rendering the applied logic constructs incompatible to each other. Compatibility, however, is a pre-requisite for the inclusion of impact investments into the portfolios of traditional institutional investors. Much can be gained from this, not only would a huge inflow of capital improve the social and environmental sector, but early evidence shows that the overall performance of mixed portfolios might profit because the experienced low correlation of impact investments to traditional markets reduces portfolio risk and increases sustainability. In addition, more and more investors demand ESG (environmental, social and governance) criteria to be considered when it comes to building portfolios because of the great opportunities provided.

Cognitive Differences and Their Impact on Information Perception: An Empirical Study Combining Survey and Eye Tracking Data

Research shows that the quality of managerial decision making is dependent on both the availability and the interpretation of information. Visualizations are widely used to transform raw data into a more understandable format and to compress the constantly growing amount of information being produced. However, research in this area is highly fragmented and results are contradicting. A possible explanation for inconsistent results is the neglect of individual characteristics such as experience, working memory capacity, or cultural background. We propose a preliminary model based on an extensive literature review on cognition theory that sheds light on potential individual antecedents of information processing efficiency. Our preliminary results based on eye tracking, automated span tasks, as well as survey data show that domain expertise, spatial ability and long term orientation exert a significant influence on this cognitive construct.

Antecedents of social entrepreneurship: between public service motivation and the need for achievement

A survey designed by the authors was administered to social impact hub members worldwide in an effort to better understand the motivational bases of social entrepreneurs. A specific focus in this study was the relationship between entrepreneurial traits, social entrepreneurial identity, and the actual success of a social venture. The assumptions from field observations that the construct of social entrepreneurial identification (SEII) and the successful start of a social venture (SUCC) are related were confirmed when controlling for gender, family, and cultural influences. Public service motivation (PSM), paired with a strong locus of control (LoC), innovativeness (INN) and tenacity (TE) were found to be the suggested qualities of social entrepreneurs. However, managerial experience and a pro-entrepreneurial background culture were much more predictive than was SEII. This study provides an empirical foundation for future research in the area of social entrepreneurship motivation, as well as practical implications for fostering social ventures.

A Case for an Islamic Social Impact Bond

While the premise of Islamic finance is often couched in the principle of maqasid al-shariah with claims to social justice and welfare, the impact and contribution to the social sector has been minimal. This paper examines the claim among critics that there is an inherent weakness in the Islamic banking and finance industry in terms of its underdeveloped social sector. We argue that to be true to its spirit, Islamic finance has to have a more inclusive role in the economy by enhancing the proliferation of shariah compliant financial products for solutions in the social sector. The paper also highlights developments of SIB (social impact bond) in the social finance space and draws parallel to similar trends in Islamic finance. The paper provides a case for structuring an Islamic SIB by highlighting the benefits of such structures.

A push-and-pull factor model for environmental management accounting: a contingency perspective

In order to further develop the theoretical basis of environmental management accounting (EMA), a contingency perspective is used in this paper to explain the initial implementation and design of EMA in firms, based on internalities as well as externalities. Nine variables have been identified to impact EMA either via push or pull mechanisms. A integrative model of these pull and push factors is the outcome of two large-scale triangulated case studies that were conducted within the global companies Borealis Group and Puma SE based on exemplary cases. Interviews with sustainability representatives and a discourse analysis of related press and media releases are included for triangulation. All the collected data were coded into nine a-priori variables, previously identified in a meta-analysis of existing literature. The following factors have a push influence on EMA: location, interdependence, availability of resources, ownership and control as well as uncertainty. In contrast, only three variables pull EMA into an organisation: the size, history and the organisations strategy.