Paper Type
Short
Paper Number
1891
Description
This study explores the financing of entrepreneurial ventures that integrate artificial intelligence systems and sustainability objectives within their IS architecture. While IS research has begun examining the intersection of AI and sustainability, little is known about the combined impact on startup funding. The study empirically examines how AI and sustainability orientation influence startup funding using OLS and logistic regression models. A k-fold cross-validation algorithm with repeated sampling is modeled as an additional robustness test. As expected, sustainability-oriented startups face fundraising challenges compared to their counterparts. Notably, investors tend to invest less in startups with AI-based systems. However, this effect diminishes when AI systems and sustainability focus coalesce. Nonetheless, results also show a tendency for such startups to have an increased probability of securing funding. By examining this underexplored intersection, the study sheds light on the intricate dynamics shaping the funding landscape for startups embracing AI technologies and sustainability objectives.
Recommended Citation
Ibrahimli, Ulvi; Isaak, Andrew Jay; and Winkelmann, Axel, "When Technology Meets Purpose: Impact of Artificial Intelligence and Sustainability on Startup Financing" (2024). PACIS 2024 Proceedings. 7.
https://aisel.aisnet.org/pacis2024/track05_dibusmod/track05_dibusmod/7
When Technology Meets Purpose: Impact of Artificial Intelligence and Sustainability on Startup Financing
This study explores the financing of entrepreneurial ventures that integrate artificial intelligence systems and sustainability objectives within their IS architecture. While IS research has begun examining the intersection of AI and sustainability, little is known about the combined impact on startup funding. The study empirically examines how AI and sustainability orientation influence startup funding using OLS and logistic regression models. A k-fold cross-validation algorithm with repeated sampling is modeled as an additional robustness test. As expected, sustainability-oriented startups face fundraising challenges compared to their counterparts. Notably, investors tend to invest less in startups with AI-based systems. However, this effect diminishes when AI systems and sustainability focus coalesce. Nonetheless, results also show a tendency for such startups to have an increased probability of securing funding. By examining this underexplored intersection, the study sheds light on the intricate dynamics shaping the funding landscape for startups embracing AI technologies and sustainability objectives.
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