Deployment of funding across non-profit, hybrid, and for-profit ventures

Abstract

ABSTRACT The dual financial and social missions of hybrid social ventures can make it difficult for founders to obtain the financial investments needed to launch their startup. In response, founders may use various bricolage strategies to obtain funding. This study explores differences in financing strategies between hybrid social ventures and their non-profit and for-profit counterparts. As hypothesized in this study, social ventures earn higher revenue and more external equity than non-profit ventures, and less of both kinds of funding than for-profit ventures. The opposite is true for philanthropic support. Results are more nuanced for debt and ‘bootstrapping’ finance strategies related to founders’ own investments. While these findings support and contradict previous research in different areas, they also suggest that the nature of hybridity may force bricolage to interact with traditional finance theories to better explain the nature of hybrid venture financing.