Financing Sustainable Entrepreneurship: ESG Measurement, Valuation, and Performance

Published in , 2022

Abstract: Sustainability orientation has a positive effect on startups’ initial valuation and a negative effect on their post-funding financial performance. All else equal, improving sustainability orientation by one standard deviation increases startups’ funding amount by 28% and decreases investors’ abnormal returns per post-funding year by 16%. The results hold in a large sample of blockchain-based crowdfunding campaigns, also known as Initial Coin Offerings (ICOs) or token offerings. A key contribution is our a machine-learning approach to assess startups’ Environment, Society and Governance (ESG) properties from textual data, which we make readily available at