Reaching sustainable development is one of the most pressing concerns of our time. From an industry perspective, this calls for a sustainable industrial transformation, including a foundational shift in long-standing practices and social norms that currently set unsustainable industry trajectories. High expectations have redirected the focus to sustainable ventures with the potential to address sustainability challenges as entrepreneurial opportunities while integrating sustainability goals into their core values. These ventures not only have the potential to challenge but also to surpass incumbent firms in contributing to radical innovations and sustainability solutions, positioning them as key catalysts and entrepreneurial pioneers in the forthcoming sustainable industrial transformation. However, a key factor in enabling these ventures to succeed lies in their ability to secure financing to sustain and grow their businesses.

Despite the rapid growth of sustainable financial markets and a growing interest among financial actors in leading the industrial transition, the actual financing reaching sustainable ventures remains scarce. Sustainable ventures tend to misalign with current sustainable finance frameworks and deviate from the type of investment that financiers typically prefer. These circumstances represent a critical shortcoming and a significant impediment for sustainable ventures seeking to realize their full potential in generating sustainability impacts. 

In complement to traditional entrepreneurial finance, which regularly explains financing gaps through agency-based reasoning and information asymmetric problems, this thesis argues for the need to further investigate the social underpinnings of this financing gap, suggesting that current theorizing may not fully explain the financing access gap faced by sustainable ventures. From a socialized perspective, information may not be missing but rather contested. Drawing on the sustainable entrepreneurship and entrepreneurial finance literature, the theoretical framework of this thesis integrates perspectives from organizational identity theory, reference points theory, and the dynamic capabilities view, with the purpose of advancing understanding of access to external financing in sustainable ventures. More specifically, this thesis seeks to understand how sustainable ventures' organizational identity, performance reference points, and dynamic capabilities relate to access to external financing. 

This thesis adopts a qualitative research approach implemented through a multiple case study strategy.  53 case companies representing finance-seeking sustainable ventures, and their associated financers were selected based on theoretical sampling. Data were mainly collected from 109 semi-structured interviews, supplemented by secondary data. Data were analyzed following a stepwise and iterative coding process to identify emerging codes, themes, and overarching categories, inspired by the method of Gioia et al., (2013). To ensure a comprehensive analysis, the cases were considered holistically rather than in isolation.

This thesis integrates the findings of four appended studies into a framework for understanding the finance access gap and the (mis)alignment between sustainable ventures and external financiers in financial exchange situations. As a theoretical lens, organizational identity theory[1] is used to analyse the study’s findings as a coherent set of values (hybrid identity), practices (performance reference points), and routines (dynamic capabilities) that tends to shape the self-defining identity of sustainable ventures and, furthermore, to inform the identity interpretations made by external financiers.

The framework reveals an almost dichotomous misalignment between the ventures' self-defining identities and the identity interpretations of private debt and equity financiers. This identity misalignment tends to negatively influence funding decisions, expressed as pending or declined funding. 

Conversely, the framework identifies a strong identity alignment between the ventures' self-defining identity and the identity interpretations of corporate debt and equity financiers. This alignment thus tends to positively influence funding decisions, leading to pending or accepted funding, although the funding is associated with a significant risk of losing ownership and control.  

Moreover, the potentially contradictory identity interpretations of financiers tend to trigger critical identity work in sustainable ventures, who seek to balance the financier's conflicting identity expectations and identity change demands while strengthening their self-defining identity, including maintaining sustainability-driven values and aspirations.

From a socialized perspective, the sustainability-driven identity of sustainable ventures seem to significantly constrain their access to external financing, primarily because they are interpreted as misaligned with private debt and equity financiers’ perception of a financially viable funding prospect. Furthermore, they are categorized as outside the scope of conventional financing frameworks and practice. Specifically, these financiers expect ventures to display conventional industry practice or "business as usual" to increase fundability. This represents a serious shortcoming because such expectations conflict with the very values, practices, and routines that define the venture's self-defining identity and that are held to be vital to achieve measurable and positive sustainability outcomes beyond the principles of “reducing harm”.

This thesis contributes to the emerging literature on sustainable entrepreneurship by proposing a framework for understanding the financing access gap, which seems to prevent sustainable ventures from growing and expanding. Moreover, this thesis contributes to organizational identity theory, reference points theory, and the dynamic capability view by demonstrating how sustainable ventures' hybrid identity, multiple reference points, and sustainability-oriented dynamic capabilities tend to be associated with access to external financing in adverse ways. In addition, the findings carry novel implications for both policy and practice and offer empirical insights that may enhance the development of better metrics and models to support the advancement of sustainable venturing and the leverage of potentially transformative sustainability innovations.

 [1] (see Albert & Whetten; 1985; Corely et al., 2006; Pratt 2018; Whetten, 2006).