Social Enterprises & Impact Investors - A Complicated Relationship

Abstract: Purpose: The purpose of this thesis is to examine and understand the underlying reasons behind the existing funding gap between social enterprises and impact investors. We aim to do this mainly from the point of view of the social entrepreneurs by studying their actions and attitudes towards impact investment and how they relate to the demands set by impact investors. Furthermore, we want to better understand the current situation of impact investment in Sweden. Methodology: This study is a qualitative case study with an abductive approach. We have collected data through semi-structured interviews with eight social enterprises, four industry experts and one impact investor. Theoretical perspectives: The study addresses the demands impact investors have on social enterprises and the social entrepreneurs’ attitudes towards these from the perspectives of Institutional and Hybrid Logics. Empirical foundation: The empirical material addresses the attitudes social entrepreneurs have toward the investment criteria’s of impact investors. Conclusions: We found that a majority among social entrepreneurs have a positive attitude towards the concept of impact investment. However, we were unable to determine if their attitudes are the result of any specific underlying factors. We can also conclude that social entrepreneurs deem the requirements set by impact investors too demanding.