Balancing financial and social goals: Do social startups grow like other startups?

Purpose: Social startups are hybrid organizations that pursue positive social or environmental impact in addition to financial returns. Such a dual mission may limit the startups’ ability to achieve their financial goals. This work examines whether social startups exhibit different economic performance compared to other startups.

Design/methodology/approach: By leveraging Italian legislation and the B Corp regulation to identify social startups, we conducted multivariate regression analyses on several panel data samples up to 2,797 startups. This study adopts imprinting, signaling and human capital theoretical lenses to explain the performance of the analyzed startups.

Findings: Social startups perform as well as others in terms of revenue growth and employee growth, notwithstanding their dual mission to pursue both positive financial returns and social or environmental impact.

Originality/value: By integrating imprinting, signaling and human capital theories, this study offers a unique and comprehensive empirical contribution to the literature on social entrepreneurship and entrepreneurial growth. It advances the academic discourse on startup performance and growth by offering a novel perspective on the relationship and balance between economic performance and social or environmental purposes.