Abstract
Green start-ups are increasingly recognized as transformative agents addressing environmental and social challenges, operating within a multifaceted stakeholder environment where diverse interests shape their development. While existing literature covers a wide range of dimensions, a gap persists in understanding green start-ups’ sustainable value co-creation processes from a stakeholder-oriented perspective. To address this gap, we adopted a qualitative methodology based on in-depth interviews with founders of Austrian green start-ups, investigating how they engage with stakeholders and co-create value. Our findings reveal a dynamic process in which green start-ups initiate sustainable value co-creation through opportunity recognition and dual economic and sustainability goals. They iteratively adjust strategies based on stakeholder feedback, engaging with a broad set of stakeholders that includes the natural environment, society, employees, customers, and business partners. Through continuous learning, partnership development, and customer-oriented adaptation, these ventures co-create four types of value: economic, relational stakeholder, sustainable, and innovation. These insights contribute to sustainable entrepreneurship by elucidating co-creative entrepreneurial adjustment and to stakeholder theory by demonstrating how green start-ups treat the natural environment and society as legitimate co-creation partners. This research provides a foundation for future studies on sustainable value co-creation in entrepreneurial contexts.
Keywords
Introduction
In recent decades, there has been a remarkable escalation in recognition of critical environmental issues, including but not limited to climate change, biodiversity depletion, and the pervasive threat of global warming (Hockerts and Wüstenhagen, 2010; Kuckertz et al., 2019; Pereira et al., 2012). A growing number of enterprises have responded to these challenges by actively pursuing more socially and environmentally conscious governance (Bergset and Fichter, 2015; Bigliardi et al., 2022). Within this broader transformation, green start-ups have emerged as noteworthy agents of change, addressing environmental and social concerns while offering valuable insights for the broader business community seeking responsible and forward-thinking strategies (Chapman and Hottenrott, 2022; Muñoz and Cohen, 2018). By leveraging innovative business models, these ventures transform environmental and social challenges into entrepreneurial opportunities (Kuckertz and Wagner, 2010), generating value that extends across economic, environmental, and societal domains (Bacq and Aguilera, 2022; Criscuolo and Menon, 2015; Demirel et al., 2019).
Green start-ups such as Treeapp, Viva Maris, and d.light illustrate how such ventures exploit market failures and stakeholder demands to drive sustainability. Treeapp, a UK-based start-up, enables users to plant trees through partnerships with eco-conscious brands, thereby contributing to global reforestation efforts. Similarly, Viva Maris GmbH, based in Germany, addresses the overfishing crisis by offering plant-based seafood alternatives, creating value for both consumers and marine ecosystems. In a different context, d.light provides solar-powered solutions to households and businesses in developing African countries, reducing energy poverty and improving quality of life. These examples illustrate how green start-ups simultaneously address socio-environmental challenges and create value for multiple stakeholders.
Green start-ups operate within a multifaceted stakeholder environment, where the interplay of diverse interests and perspectives shapes their development trajectories (Demirel et al., 2019; Raha et al., 2021). Stakeholders range from environmentally conscious consumers and investors (Mrkajic et al., 2019) to regulatory bodies, local communities, and business partners (Arora, 2015). The alignment of these stakeholders’ interests, combined with effective engagement strategies, influences not only firm growth and market positioning but also the broader diffusion of sustainable practices (Bacq and Aguilera, 2022; Fischer et al., 2020). As a result, value creation in green start-ups is inherently relational and dependent on interactions across multiple stakeholder groups.
Recent research increasingly emphasizes that sustainability-oriented ventures do not generate value in isolation but through collaborative interactions with stakeholders. This shift is captured by the concept of sustainable value co-creation, which highlights how firms and stakeholders jointly generate economic, social, and environmental value through ongoing engagement and mutual adjustment (Apostolidis et al., 2021; Bacq and Aguilera, 2022; Freudenreich et al., 2020; Mathibe et al., 2023). In entrepreneurial contexts, such co-creation processes are particularly critical, as new ventures rely on stakeholders not only for resources and legitimacy but also for knowledge, experimentation, and the refinement of sustainable solutions (Brown et al., 2024, 2025; Freudenreich et al., 2020). This perspective is particularly central to social and sustainable entrepreneurship, where value creation depends on multi-stakeholder collaboration in addressing complex societal challenges. Understanding green start-ups, therefore, requires moving beyond firm-centric perspectives toward a relational view centered on stakeholder interaction and joint value creation.
Despite these advances, the literature on green start-ups remains fragmented in explaining how sustainable value is co-created through stakeholder interactions (Demirel et al., 2019). While prior studies examine sustainable entrepreneurship (Belz and Binder, 2017; Cohen and Winn, 2007; Dijkstra and Planko, 2023; Han et al., 2023; Terán-Yépez et al., 2020) and eco-innovation (Demirel and Danisman, 2019), the mechanisms through which green start-ups engage diverse stakeholders to co-create sustainable value remain underexplored. In particular, there is limited understanding of how these processes unfold dynamically in early-stage ventures operating under resource constraints and evolving stakeholder configurations.
To address this issue, our study poses the following research question: How do green start-ups co-create sustainable value with multiple stakeholders? We aim to illuminate the mechanisms through which stakeholder engagement and value co-creation unfold in sustainable entrepreneurship. This focus is particularly important given the complexity of stakeholder relationships—including investors, customers, employees, and broader societal actors—which shape entrepreneurial processes and outcomes. In practice, green start-ups operate within collaborative ecosystems that depend on partnerships and external support, underscoring that entrepreneurial action is inherently collective (Karami and Read, 2021; Kohler, 2016). Addressing socio-environmental challenges, therefore, requires coordinated stakeholder engagement and the development of collaborative environments in which sustainable value is jointly created (Bridoux and Stoelhorst, 2022; Brown et al., 2025; Shams and Kaufmann, 2016).
Adopting a qualitative method, this study contributes to the literature at the nexus of entrepreneurship and stakeholder theory (Bosse et al., 2023; Vedula et al., 2022), while advancing understanding of sustainable value co-creation in green start-ups. This inquiry is particularly relevant given Venkataraman's (2019: 163) argument that entrepreneurship and stakeholder perspectives are complementary, representing “two sides of the same coin: the coin of value creation and sharing,” which encapsulates the processes of discovering, creating, and distributing value among diverse stakeholders. While traditional entrepreneurship theory has primarily focused on individual entrepreneurs and market conditions (Shepherd, 2020), this research emphasizes the pivotal role of both market and nonmarket stakeholders in shaping entrepreneurial processes and outcomes. Drawing on the stakeholder framework, the study shifts from an agent-centric view to a broader, outward-looking perspective on entrepreneurial action, building on the idea that entrepreneurship fundamentally serves the needs of others—consumers, communities, and wider society (Packard and Burnham, 2021). As Schlange (2009: 26) notes, sustainability-driven entrepreneurs forge relationships with stakeholders who align with societal norms (legitimacy), share their core values (philosophy), and offer potential for transformative impact across economic, social, and ecological domains. In doing so, this study provides novel insights into how green start-ups engage stakeholders to co-create sustainable value, thereby revealing the mechanisms through which green entrepreneurship mobilizes stakeholder relationships to support sustainability transitions.
The remainder of the paper is structured as follows. First, we review the relevant literature. Second, we outline the qualitative methodology. Third, we present the findings. Finally, we discuss the results and contributions.
Literature review
Definition, opportunities, and challenges
Over the past decade, the number of green start-ups worldwide has increased steadily. Reports indicate that more than 42,000 such companies operated in North America and Europe in 2022, compared to only a few hundred in 2015, pointing to a remarkable expansion of this phenomenon (Statista, 2024). Green start-ups often emerge in sectors such as renewable energy, sustainable agriculture, and circular economy solutions, where environmental challenges create opportunities for innovation (Olteanu and Fichter, 2022). This rapid growth has attracted increasing scholarly attention (Demirel et al., 2019; Gast et al., 2017; Jones, 2017; Jones et al., 2019; Kearins and Collins, 2012). Research on green start-ups has developed at the intersection of innovation and entrepreneurship scholarship (Chen et al., 2023; Hall et al., 2010). At the same time, this field remains relatively young, and further research is needed to capture its different dimensions more comprehensively (Demirel et al., 2019). When defining green start-ups, scholars have emphasized different characteristics and perspectives. Table 1 summarizes the main definitions identified in the literature and groups them into four categories according to the perspective adopted.
Definitions of green start-ups.
Green start-ups are typically understood as newly established ventures that pursue both economic and socio-environmental objectives by developing innovative business models and solutions (Bergset and Fichter, 2015; Todeschini et al., 2017). They combine resources in novel ways, explore new capabilities, and leverage innovation to address sustainability-related challenges while creating economic value. These solutions are often embedded in new products or services offered to the market (Bergset, 2015; Bergset and Fichter, 2015; Gaurav et al., 2019), thereby contributing to broader transitions toward a greener economy (Bergset and Fichter, 2015; O’Neill and Gibbs, 2016).
Beyond their economic function, green start-ups exhibit distinct characteristics that differentiate them from conventional entrepreneurial ventures. In particular, they demonstrate an ability to interpret business opportunities through an environmental lens (Esty and Winston, 2009) and to identify opportunities arising from market failures related to sustainability (Demirel et al., 2019). As a result, their activities generate both tangible and intangible forms of value across economic, environmental, and social domains (Esty and Winston, 2009).
In this study, we adopt a hybrid definition of green start-ups as newly established ventures that “exploit environmentally relevant market failures” while “providing practical and innovative solutions for social and environmental concerns” (Dean and McMullen, 2007; Demirel et al., 2019). This framing emphasizes their dual role in opportunity exploitation and value creation, highlighting their capacity to generate economic, social, and environmental value for multiple stakeholders (Kuckertz et al., 2019). Also, this definition is particularly suited to examining how such ventures engage stakeholders in processes of sustainable value co-creation.
Discovery and exploitation of opportunities
As with other entrepreneurs, green start-ups discover, create, evaluate, and exploit opportunities (Cohen and Winn, 2007; Kuckertz et al., 2019; Venkataraman, 1997). In their case, these opportunities arise from environmental market failures—where markets fail to address issues like global warming, resource scarcity, or pollution (Alwakid et al., 2021)—and growing stakeholder demands for sustainable products (Dean and McMullen, 2007; Kuckertz et al., 2019). Far from being solely profit-driven, these opportunities enable green start-ups to create value for diverse stakeholders, a process stakeholder theory frames as joint value creation (Bridoux and Stoelhorst, 2022). For instance, overfishing inspires ventures like Viva Maris to develop plant-based seafood, delivering value to consumers (healthy alternatives), marine ecosystems (reduced pressure), regulators (sustainability compliance), and investors (market growth potential) (Hockerts and Wüstenhagen, 2010). Exploring these opportunities is critical to this study as it reveals how green start-ups transform socio-environmental challenges into stakeholder benefits, setting the stage for our analysis of value creation mechanisms.
Beyond market failures, growing stakeholder demands for sustainable products and operations offer additional opportunities for green start-ups to co-create value (Baranova, 2024; Dean and McMullen, 2007). Rising consumer awareness of environmental degradation, evidenced by their willingness to pay premiums for eco-friendly goods (Laroche et al., 2001), spurs ventures like d.light to deliver solar solutions, enhancing energy access for underserved communities while yielding returns for investors. This responsiveness extends beyond customers—regulators benefit from compliance with green standards, and local communities gain from reduced environmental harm (Hart and Milstein, 2003). Thus, green entrepreneurs have the opportunity to act accordingly, improving sustainability and responding to diverse stakeholder interests and needs (Dean and McMullen, 2007).
Challenges faced by green start-ups
Green start-ups face distinct challenges that test their ability to co-create and deliver value to multiple stakeholders. One primary hurdle is the liability of newness and smallness (Palmié et al., 2021), which constrains resources—both tangible (e.g. capital) and intangible (e.g. expertise)—limiting their capacity to address complex sustainability issues (Hockerts and Wüstenhagen, 2010). For instance, a start-up like Treeapp, reliant on eco-brand partnerships to fund reforestation, struggles to scale impact for ecosystems and communities when resources are thin, directly affecting the environmental and social value stakeholders expect (Todeschini et al., 2017).
Building reputation and relationships with diverse stakeholders poses another challenge (Skordoulis et al., 2017). Unlike established firms, green start-ups must educate consumers about sustainable solutions and convince regulators of their efficacy, all with limited marketing resources (Hockerts and Wüstenhagen, 2010; Todeschini et al., 2017). This vulnerability delays trust-building—crucial for consumer uptake and investor confidence—hindering value delivery across economic (sales), social (awareness), and environmental (impact) dimensions. A start-up struggling to reach mass markets, for example, may fail to reduce emissions at scale, disappointing stakeholders like regulators and local communities who rely on tangible outcomes.
Securing funding further complicates value creation (Bergset, 2015; Demirel et al., 2019). Investors often view green start-ups as high-risk due to long payback periods and scalability concerns, compounded by information gaps about their unique models (Demirel et al., 2019). Without a clear “green signal,” funding dries up. For instance, the signal might include obtaining a sustainability certification like B Corp status or demonstrating a measurable reduction in CO2 emissions, as seen with d.light's solar solutions, which attract investor confidence by showcasing tangible environmental impact.
These challenges matter because they reveal the barriers green start-ups must overcome to align innovation with stakeholder interests, shaping the strategies we analyze in this study.
Green start-ups and value (co)creation
The question of how entrepreneurs create value has been a focal point in green entrepreneurship literature (Hitt et al., 2011; Kuckertz et al., 2019; Muñoz and Cohen, 2018) and extends into strategic management and stakeholder scholarship (Bruyat and Julien, 2001; Hitt et al., 2011). Entrepreneurs typically generate value through innovative business approaches, novel methods, and emerging technologies or materials (Lepak et al., 2007; Porter, 1985), yielding benefits for multiple stakeholders (McVea and Freeman, 2005; Windsor, 2017). In green start-ups, this value transcends economic gains, prioritizing environmental and social dimensions (Kuckertz et al., 2019). Stakeholder theory provides a critical lens here, framing business operations as networks of relationships that serve as platforms for value creation and sustainable value co-creation among multiple actors (Brown and Pattinson, 2024; Freudenreich et al., 2020; Tapaninaho and Heikkinen, 2022). This perspective posits that value emerges not just from firm-centric innovation but from negotiated interactions among stakeholders, where trust and cooperation amplify ecological and social benefits while minimizing harmful externalities (Schwartz and Carroll, 2008; Tapaninaho and Heikkinen, 2022). Thus, value in this context reflects a synergy of economic profitability and sustainable impact (Garriga, 2014; Schwartz and Carroll, 2008).
Scholarly debate also explores the diverse types of value businesses can generate, expanding beyond traditional economic metrics. Ormiston and Seymour (2011) propose a broader spectrum, including natural, cultural, and creative value, while Kuckertz et al. (2019) categorize it into technological, social, and organizational forms, contingent on a start-up's sustainable vision. This aligns with stakeholder value creation frameworks, which emphasize the subjective, context-specific nature of value—negotiated, created, or even destroyed within stakeholder relationships (Garcia-Castro and Aguilera, 2015; Raha and Kazemi, 2025). Recent studies further conceptualize these interactions as sustainable value co-creation processes, where entrepreneurs and stakeholders collaboratively generate environmental, social, and economic value through ongoing engagement (Apostolidis et al., 2021; Brown et al., 2024; Mathibe et al., 2023). Such multidimensionality challenges conventional CSR approaches, advocating instead for integrated social, environmental, and economic responsibilities that enhance stakeholder welfare (Tapaninaho and Kujala, 2019). In sustainable entrepreneurship, this manifests as joint value creation activities—for example, co-constructing knowledge or developing local ecosystems—that reflect a circular economy ethos (Konietzko et al., 2020).
Business models offer another lens for studying value (co)creation, describing how firms create and capture value for themselves and stakeholders (Bocken et al., 2014; Palmié et al., 2021). Sustainable business models, in particular, adopt a holistic approach, balancing economic value with the preservation of natural and social assets (Evans et al., 2017; Geissdoerfer et al., 2018). This resonates with stakeholder synergy, where strategic actions simultaneously enhance utility for multiple stakeholder groups without trade-offs, fostering competitive advantage across economic, social, and environmental dimensions (Carroll and Buchholtz, 2008; Tantalo and Priem, 2016). Analyzing components like value propositions, customer relationships, cost structures, supply chains, and stakeholder dynamics reveals how these models operationalize value creation (Boons and Lüdeke-Freund, 2013), aligning with the stakeholder relationship perspective that broadens value beyond firm-centric boundaries (Dyer et al., 2018; Freudenreich et al., 2020).
Stakeholder involvement emerges as a pivotal theme in this process, with research underscoring their active role in co-creating sustainable value alongside entrepreneurial ventures (Apostolidis et al., 2021; Bosse et al., 2023). In green start-ups, value and opportunities are often co-created through collaboration between entrepreneurs and stakeholders, whose assessments and engagement sustain environmentally friendly practices (Alvarez et al., 2020; Ramoglou et al., 2023). This echoes Garriga's (2014) focus on stakeholder capability, where value hinges on empowering stakeholders to contribute meaningfully, challenging traditional utility-based models (Raha and Kazemi, 2025). Understanding stakeholder needs thus becomes essential for effective sustainable business models (Burga and Rezania, 2016; Kahupi et al., 2021; Kuckertz et al., 2019). Recent intersections of entrepreneurship and stakeholder theory highlight this dynamic, emphasizing trust, cooperation, and systemic collaboration as drivers of sustainability (Bosse et al., 2023; Tapaninaho and Kujala, 2019).
Despite these advances, defining value (co)creation in green entrepreneurship remains complex and ambiguous (Choi and Majumdar, 2014; Hlady-Rispal and Servantie, 2018). The literature reveals a lack of consensus on its nature and measurement, reflecting the multifaceted interplay of stakeholder interests and sustainability goals (Hlady-Rispal and Servantie, 2018).
Methods
To understand the value creation mechanism in green start-ups, we adopted a qualitative research approach, which provides an in-depth exploration of the complex, multifaceted, and context-dependent nature of this phenomenon (Creswell and Poth, 2016). This method offers two key strengths: accuracy of information and context-sensitivity (Cardano, 2020). The former ensures rich, detailed insights by allowing participants to freely express their experiences through methods like interviews, avoiding the constraints of preconceived frameworks (Patton, 2014). The latter preserves participants’ natural environments, enabling responses that enhance the reliability and relevance of the data collected (Cardano, 2020; Myers, 2019). These qualities enable us to uncover insights directly from participants’ perspectives, making qualitative research ideally suited to capturing the nuanced processes of value creation in green start-ups.
We followed a purposive sampling approach, selecting Austrian green start-ups based on theoretical significance rather than statistical representativeness. Austria offers a relevant empirical context as the country features strong institutional support for sustainability and advanced environmental regulations, alongside an active ecosystem for green entrepreneurship. These conditions enable an examination of stakeholder-driven value creation within a mature sustainability-oriented setting. Specifically, we chose the “Green Tech Valley Cluster,” 1 the most important green cluster in the country, as our main source. Founded in 2005 to guide and support the development of innovative Austrian green companies, the cluster has a partnership with more than 1000 businesses and 18 other international energy and environmental technology clusters. This cluster offered us a comprehensive and up-to-date overview of 165 Austrian green start-ups. Second, companies were selected based on their complexity and information richness. Among them, we found 80 companies to be interesting, information-rich, and, therefore, potentially suitable for the research (Patton, 2014). Moreover, the chosen companies represented a convenient or opportunistic sample since they were inexpensive to access (Tracy, 2013). For these reasons, those 80 companies were chosen and contacted by email over about two weeks.
The final sample consisted of 10 Austrian green start-ups founded between 2018 and 2021, employing between 1–10 and 20–30 employees. The ventures operate across several sustainability-oriented sectors, including sustainable materials (pulp and paper alternatives), environmental technologies and data science, sustainable food systems, electric mobility, and green infrastructure. While these sectors differ in technological focus, they share several defining characteristics that justify treating them as a coherent analytical sample (Elmholdt et al., 2026). All firms pursue sustainability-oriented innovation aimed at addressing environmental challenges and rely on novel technologies or business models to generate environmental, social, and economic value. Moreover, these ventures actively engage a range of stakeholders—including customers, partners, investors, and communities—in developing and implementing their solutions, making them suitable cases for examining mechanisms of sustainable value co-creation in green entrepreneurship. Such qualitative designs are commonly used to investigate sustainability-oriented innovations, with several studies on circular economy and sustainability transitions examining comparable sets of firms (e.g. Neri et al., 2023; Ranta et al., 2021; Suarez-Visbal et al., 2024). Further information about each company and its industry context is provided in Table 2.
Company profiles.
Accordingly, a total of 10 in-depth, semi-structured interviews were conducted among different founders of Austrian green start-ups. Semi-structured interviews not only allowed us to delve deeper into the studied phenomenon (Rowley, 2012) but also enabled us to steer the conversation in a certain direction while following the flow of our interviewees’ thoughts (Galletta, 2013). We specifically targeted founders because they play a central role in shaping the start-up's strategy and engaging with stakeholders, offering firsthand insights into the start-up ecosystem and the mechanisms driving value creation. Eight participants introduced themselves as male and two as female, with ages ranging primarily between 28 and 55 years. Nationality varied, with five participants being Austrian and the remaining five representing Italian, Danish, French, German, and Russian backgrounds (one each). Education levels were notably high, with two participants holding PhDs, four possessing Master's degrees, one having a Bachelor's degree, and three being high school graduates. This diversity in gender, age, nationality, and education enriched the perspectives gathered, enhancing the depth of our exploration into value creation within the green start-up ecosystem. To maintain the anonymity of the participants, the following alphanumeric codes will be used to identify the various interviewees: “Participant 1 = P1,” “Participant 2 = P2,” and so on, from P1 to P10, as shown in Table 3, which provides the participant information.
Interviewees profiles.
The semi-structured interview guide was developed through a systematic process, drawing on key literature themes identified in the study's theoretical framework, including green start-up characteristics, stakeholder identification, value creation, environmental and societal impacts, and prospects (e.g. Kuckertz et al., 2019; sections 2.2 and 2.3). Questions were designed to explore these areas—for example, “Can you describe the green characteristics of your start-up?” and “How does your start-up (co)create value for/with stakeholders?”—and were refined through pilot discussions with two academic peers to ensure clarity, relevance, and flexibility (Rowley, 2012).
Interviews were conducted over four weeks between February and April 2023. Two out of 10 interviews were conducted face-to-face to accommodate local participants’ preferences and foster richer understanding, while the remaining eight were held via video-call applications such as Google Meet and Zoom due to geographical and scheduling constraints, ensuring broader participation (Tracy, 2013). In all interviews, both the interviewee and the interviewer had cameras and microphones on to simulate a face-to-face interaction, with no significant quality differences observed between formats, though online sessions occasionally faced minor technical delays (e.g. brief audio lags). The interviews lasted between 40 and 90 min and were audio-recorded after obtaining informed consent from participants, who voluntarily agreed to participate, understood their right to refuse questions, and were assured of confidentiality and anonymity, with transcripts retaining no identifying information. Participants also consented to the use of recordings for data analysis only, with access to their provided information upon request. Data collection continued until theoretical saturation was reached, meaning that additional interviews no longer generated substantially new themes related to stakeholder engagement and value creation processes (Elmholdt et al., 2026; Guest et al., 2006). After approximately eight interviews, recurring patterns began to stabilize, and two additional interviews were conducted to confirm the robustness of the emerging insights.
Analysis and results
Interviews were transcribed precisely, followed by additional verification to ensure the accuracy and reliability of participants’ responses. More specifically, data were analyzed using thematic analysis, following Braun and Clarke's (2006) six-phase approach: familiarization, coding, theme searching, reviewing, defining, and reporting, facilitated by the qualitative data analysis software MAXQDA (Kuckartz and Rädiker, 2019). This method and tool were chosen for their flexibility in identifying emergent patterns, aligning with our inductive aim to uncover insights directly from the data. MAXQDA supported the coding process by enabling systematic organization, annotation, and retrieval of data segments, ensuring consistency across the analysis.
We performed the initial round of coding by assigning a relevant code to each part of the text deemed relevant, following Myers’ (2019) guidelines for thematic coding. The data were analyzed through multiple rounds until the final codebook emerged, with a second round conducted to refine the initial codes (Tracy, 2013). Two researchers independently coded 20% of the transcripts within MAXQDA, achieving an intercoder agreement of 85%, with discrepancies resolved through discussion. Team debriefs and an audit trail, maintained within MAXQDA's project file, ensured rigor and reflexivity, mitigating potential biases and enhancing reliability (Tracy, 2013). This codebook served as a chronological map, visualizing the evolution of codes. Initially, our codebook consisted of 21 codes; after the second round, we deleted, modified, or added codes based on thematic saturation and stakeholder relevance, resulting in a final codebook of eight codes. The analysis revealed a process-oriented pattern of sustainable value co-creation in green start-ups. Specifically, interviewees described how environmental and market challenges triggered opportunity recognition, which then informed entrepreneurial goals and strategic responses. These strategies were shaped through interaction with multiple stakeholders and ultimately generated different forms of value. Figure 1 summarizes this data structure.
Data structure.
Sustainability drivers and opportunity recognition
A first key finding was that green start-ups emerged in response to sustainability-related challenges that entrepreneurs interpreted as entrepreneurial opportunities. In line with prior research (Kuckertz and Wagner, 2010; Thompson et al., 2011), the interviewees described a process in which environmentally relevant market failures, unmet stakeholder needs, and regulatory developments created openings for new green ventures.
Environmental problems were a particularly important trigger (Hart and Milstein, 2003; York and Venkataraman, 2010). Entrepreneurs frequently described how they started from a concrete ecological problem and then developed a solution around it. As one participant from the technology and data science sector explained: “We wanted to implement a solution starting from the waste problem we saw in the different industries” (P6, Technology and Data Science Sector). This suggests that green start-ups often translate environmental challenges into business opportunities by identifying points where sustainability problems could be addressed through innovation.
At the same time, opportunities did not arise only from ecological problems themselves. Customers and potential customers also played an important role in shaping opportunity recognition, consistent with research on stakeholder-driven entrepreneurship (Dean and McMullen, 2007). Interviewees described how early interactions with customers revealed demand for sustainability-oriented products and services and, in some cases, directly prompted venture creation. As one participant noted, “It's one customer, or at the time, potential customer, who asked us to implement this solution and then prompted us to move and create the company (…) it all came from that” (P2, Technology and Data Science Sector). This indicates that opportunity recognition in green start-ups was not purely entrepreneur-driven, but also emerged through interaction with external stakeholders.
More broadly, several founders pointed to a wider market shift toward sustainability (Hockerts and Wüstenhagen, 2010). They observed that increasing demand for greener products and services created favorable conditions for new ventures. One participant stated, “We discovered that there was a need in the market … so we just followed it and we just kept following it” (P5, Technology and Data Science Sector). In addition to market demand, entrepreneurs also referred to the need for change in highly resource-intensive sectors such as food, pulp, and paper.
Finally, regulatory frameworks emerged as another important driver of opportunity recognition. Interviewees described how European and national legislation did not merely constrain business activity, but also created incentives for green entrepreneurship by opening space for compliant and sustainable alternatives. As one founder from the pulp and paper industry explained: I'm quite aware of all the food legislation (…) what is allowed to use, what is not allowed to use. Of course, the ingredients the […] use are not allowed in Europe, starting with the paper, glue, and printing inks. So, my idea was to make, let's say, a [name of the product] which is conformed to the law, which is made with European ingredients. (P1, Pulp and Paper Sector)
Entrepreneurial goals and strategic responses
Once opportunities had been identified, entrepreneurs articulated goals and developed strategies to pursue them. The findings showed that this process was shaped by a dual orientation: green start-ups sought to remain commercially viable while also pursuing broader sustainability aims (Gast et al., 2017; Melay and Kraus, 2012). At the same time, these goals were translated into strategic responses through resource mobilization, learning, and stakeholder interaction.
Sustainability-oriented and economic goals
Interviewees consistently described their ventures as pursuing both sustainability-oriented and economic goals. On the sustainability side, many founders framed their mission in terms of transforming industries, reducing environmental harm, and contributing to broader ecological improvement (Hockerts and Wüstenhagen, 2010). For example, one participant from the food sector stated: “The main goal (…) is to help the transition of industries, in this case the food industry, but also the cosmetic industry, which requires a lot of resources, into low-emissions industries” (P3, Food Sector). Another entrepreneur emphasized waste reduction and circularity: It is the goal to make an impact. To help companies improve their waste management or … more concrete … To reduce the amount of waste which is environmentally badly so … not environmentally friendly disposed (…) and increase the amount of waste which is brought back into the circle and used again. (P6, Technology and Data Science Sector)
At the same time, the founders were clear that their ventures also needed to achieve economic goals. Several participants openly stated that revenue generation, market growth, and business continuity were essential. One interviewee put this directly: “To make money; each company needs to make money because when we don't make money, then we can't run the company in the first place” (P6, Technology and Data Science Sector). Economic goals were therefore not seen as contradictory to sustainability, but as necessary conditions for sustaining and scaling impact (Schaltegger et al., 2012).
Although sustainability-oriented and economic goals dominated the interviews, some founders also explicitly framed their mission in stakeholder terms. They described their ventures as aiming to generate benefits for customers, end users, communities, and other actors (Freudenreich et al., 2020). As one participant explained: The mission is to create solutions that benefit various stakeholders in the future, including the environment, end farmers, and others. Thanks to this technology, we will benefit different stakeholders and generate savings: time savings, economic savings, waste savings, saving on pesticides. (P2, Technology and Data Science Sector)
Stakeholder-oriented strategic responses
The strategic responses of green start-ups were shaped by both internal resources and external stakeholder relations. Entrepreneurs described strategy formulation as an adaptive process in which they built on their current capabilities while also seeking to develop new knowledge, technologies, and partnerships (Bergset and Fichter, 2015).
Some interviewees emphasized that the strategy started from the resource base available to the firm. One founder stated: “We start from our resources. Depending on the availability of resources we have … then we formulate the strategy” (P7, E-vehicles and Transportation Sector). These resources included not only financial means and materials but also technical expertise, interdisciplinary knowledge, and organizational capabilities. As one participant explained: We're a team composed of biologists, engineers, and software scientists. So, we combine a lot of expertise. And our goal is to pull all of this together into one product. We're constantly all working together, and we see that it has huge benefits (…) we can really learn from each other and learn from the different activities. (P4, Food Sector) We try to learn as much as possible (…) A lot of problems can be solved with the help of digitalization, and I think, especially in the waste management industry, we have a big potential for using digitalization to improve the way things are. (P6, Technology and Data Science Sector).
Alongside resource-based considerations, stakeholder relationships were central to strategic action. Many interviewees described partnerships with firms, research institutes, and other actors as indispensable for growth and implementation (Benn et al., 2016). As one founder from the food sector explained: We are trying to build as many partnerships as possible. Our partners are indispensable for achieving our goals. So yes, the strategy is also focused on building partnerships with companies, funders, research institutes … which will help us scale up our technologies. (P3, Food Sector)
Customers also played an important role in strategy development. Interviewees described a customer-oriented approach in which communication, experimentation, and feedback informed strategic decisions. One founder noted: “We also started speaking about how to attract customers … always with the goal of you know, scale the production … we needed people to be interested in what we were doing” (P9, Green Infrastructures Sector). Another explained how product refinement emerged directly from interaction with users: “So, we delivered one of these units to our customer. And we had it running at his location for eight months. Improvements are based on what the customer wants and also on what we've seen ourselves” (P4, Food Sector).
These findings suggest that entrepreneurial strategy in green start-ups was neither purely internally driven nor purely market driven. Rather, it emerged through an ongoing combination of resource assessment, learning, partnership development, and stakeholder interaction (Mazzoni and Sedita, 2025). Specifically, the emphasis on resource recombination and adaptive strategy development highlights the role of bricolage in enabling resource-constrained ventures to mobilize stakeholders and generate social impact (Bacq et al., 2015).
Stakeholder configuration in green start-ups
The findings further showed that green start-ups operated within a distinct stakeholder configuration. In addition to more conventional stakeholders such as customers, partners, investors, and employees, interviewees also referred to society and, in many cases, the natural environment as actors affected by and relevant to the venture (Freeman et al., 2010). This broader stakeholder configuration is particularly important for understanding how sustainable value co-creation unfolds in green entrepreneurship.
Natural environment as a stakeholder
Whether the natural environment should be regarded as a stakeholder remains debated in the literature (Freeman et al., 2010; Phillips and Reichart, 2000). However, the interviews strongly suggested that entrepreneurs treated the natural environment as a central reference point in defining their mission, designing their solutions, and assessing their impact.
Three forms of environmental engagement emerged from the data: waste reduction, reduction in CO2 emissions, and protection of natural ecosystems. In the pulp and paper sector, one entrepreneur described the replacement of plastic with sustainable alternatives: “There are so many things that can be made of paper instead of plastic. It's a transformation process from one raw material, which is plastic, to another raw material, paper. Paper will become intelligent” (P1, Pulp and Paper Sector). In the food and e-vehicles sectors, founders emphasized lowering emissions, for example, through cleaner production systems and mobility solutions. One participant stated: “We are absorbing more CO2 than it is created” (P3, Food Sector), while another noted: “We are trying to replace combustion engines with electric” (P7, E-vehicles and Transportation Sector).
Protection of ecosystems also appeared as a distinct concern. As one entrepreneur explained: “What we try to do is to decouple … so separate the production from agriculture, from the natural ecosystem. To preserve the natural ecosystems” (P1, Pulp and Paper Sector, also relevant to Green Infrastructures). These findings indicate that environmental considerations were not peripheral to the ventures but deeply embedded in their entrepreneurial logic (Schaltegger et al., 2016).
At the same time, interviewees acknowledged that environmental impact often depended on successful market diffusion and implementation. As one participant noted: “If customers implement our solution, then this will have a great impact on the problem of waste” (P10, Technology and Data Science Sector). This suggests that environmental impact was frequently mediated by stakeholder adoption rather than being fully controlled by the start-up itself.
Society as a stakeholder
Society also emerged as an important stakeholder, both directly and indirectly affected by the activities of green start-ups (Schaltegger et al., 2016). Some ventures explicitly targeted social problems, while others described broader societal benefits resulting from their environmental solutions.
Direct societal impact was visible where entrepreneurs addressed issues such as food insecurity, human rights, or community well-being. For example, one participant explained: We try to address food insecurity aspects. At the moment, there are 800 million people who are suffering from food insecurity. That means not knowing what you're going to eat on the same day. We really hope to be able to expand to regions such as Africa, for instance, where there is a lot of food insecurity (…) for them, having such a system could really help. (P4, Food Sector)
Society was also affected more indirectly. Some interviewees explained that issues such as local production, reduced emissions, or legal compliance generated broader societal benefits even where society was not the immediate target group (Raha and Windsperger, 2026). As one entrepreneur noted: “We are trying to do it locally (…) save costs and CO2 emissions. So yeah, maybe in the end it is also benefiting society, but not directly” (P1, Pulp and Paper Sector). Another added: “If our technology is implemented, it will also affect society, it will have an impact on the people. Like for the end consumer. We help them to separate the material” (P10, Technology and Data Science Sector). A founder from the pulp and paper sector also linked regulatory compliance directly to public health: “We give to the market legal products that are sustainable and local … they all meet European standards, and they are good for people's health” (P1, Pulp and Paper Sector).
These accounts suggest that the societal relevance of green start-ups extended beyond direct social entrepreneurship logics. Even where the primary focus was environmental innovation, interviewees often understood their ventures as contributing to broader social well-being (Freudenreich et al., 2020).
Other important stakeholders
Beyond the natural environment and society, interviewees identified a range of more conventional stakeholders. The most frequently mentioned groups were customers and business partners, followed by employees, investors, research institutes, government, and media (Clarkson, 1995). Customers and partners were usually regarded as the most salient actors because of their immediate relevance for venture development and survival.
This pattern also reflected the relatively early stage of the firms. Several start-ups were still very small and had only limited internal structures. As one participant stated: “So, in our company … currently we are two founders and one employee” (P10, Technology and Data Science Sector). As a result, the stakeholder ecosystem of many ventures remained somewhat narrow and concentrated on actors directly involved in product development, scaling, and resource acquisition (Freeman et al., 2018).
The findings, therefore, suggest that green start-ups operate within a layered stakeholder configuration. Some stakeholders were directly involved in the entrepreneurial process, while others were affected by the broader environmental and social consequences of the venture. The next section examines how value was co-created across these stakeholder relationships and what kinds of value emerged from them.
Sustainable value co-creation and value outcomes
The concept of “value” proved to be abstract and subjectively defined by entrepreneurs (Bowman and Ambrosini, 2010; Tantalo and Priem, 2016). Nevertheless, the interviews showed that green start-ups did not create value in isolation. Rather, they developed value through interaction with multiple stakeholders whose interests, expectations, and feedback shaped the entrepreneurial process. This section first examines how key stakeholder groups participated in these processes and then outlines the main value outcomes identified in the data.
Co-creation with key stakeholder groups
Employees were described as important contributors when they shared the mission of the venture and actively participated in sustainability-oriented work. Interviewees emphasized that employees often valued meaningful work, collaboration, trust, and involvement in solving environmental problems. As one founder observed: “It was really interesting for us to see that people started to work for us because they liked the topic and they wanted to do something with meaning” (P6, Technology and Data Science Sector). Another entrepreneur noted that employees valued being involved and finding solutions: “They also like to find solutions to those environmental problems. I think in this case it's not money. It's rather to be involved in the company” (P10, Technology and Data Science Sector). At the same time, employees also expected fair compensation, respectful treatment, and work-life balance. As one participant stated: “Well, of course, they expect to get paid” (P10, Technology and Data Science Sector), while another emphasized trust and respect: “What they expect is to be, you know, respected, trusted” (P4, Food Sector). This suggests that value co-creation with employees relied on a combination of mission alignment and basic organizational conditions.
Customers were equally central. They shaped value creation by articulating expectations regarding quality, sustainability, usability, compliance, and support. One founder noted: “They expect a good product with good quality” (P1, Pulp and Paper Sector), while another emphasized sustainability: “I think what they expect is a system (…) that's really sustainable” (P4, Food Sector). In some cases, they also influenced product refinement through ongoing feedback. As one participant explained: “Meeting certain targets has become mandatory (…) We can enable respect for those regulations, and this clearly creates value” (P2, Technology and Data Science Sector). Another founder highlighted continuous support as part of customer value: “And also, they expect from me some constant help. (…) I have to be able to solve any kind of problem they can have” (P7, E-vehicles and Transportation Sector). What becomes clear is that customers were not merely passive recipients of value, but active participants in shaping the offerings of green start-ups.
Business partners also contributed to value co-creation, especially where relationships were based on trust, shared purpose, and complementarity. As one participant noted: “They know that they can trust us and that we can work well together. If there is no trust, there is also no collaboration” (P3, Food Sector). Another founder added that shared vision was critical: “They have our same vision (…) because we want to achieve the same” (P3, Food Sector). In some cases, partners were motivated by the venture's sustainability mission; in others, by technological potential, access to new customers, or future growth. As one entrepreneur explained: “They also get the value of getting new customers, getting new customers thanks to our platform, and also making money” (P6, Technology and Data Science Sector). Viewed in this light, partnerships functioned both as scaling mechanisms and as relational foundations for joint value creation.
Research institutes, investors, and public actors played more selective but still relevant roles. Research institutes valued sustainability-focused innovation and the practical application of knowledge (P2, Technology and Data Science). Investors were primarily interested in return on investment, as one interviewee noted: “Return on the investment. Yeah, 100%” (P9, Green Infrastructures Sector), but some also supported the sustainability vision of the ventures: “Some are interested in the vision and want to invest in sustainability” (P4, Food Sector). Governments and media were mainly interested in the novelty and transformative potential of the start-ups. As one founder observed: “From the political aspect (…) They are interested in what we do because they believe that is going to change something” (P4, Food Sector).
Across these stakeholder groups, a consistent pattern emerged: value co-creation depended on aligning the venture's mission and capabilities with stakeholder expectations, while maintaining trust and ongoing communication (Freeman, 2007; Schneider and Sachs, 2017).
Value outcomes
Interviewees referred to several different forms of value (Biloslavo et al., 2018). However, these forms were not always clearly separated by the respondents themselves. Based on the data, four main value outcomes were identified: economic value, relational stakeholder value, sustainable value, and innovation value.
Economic value referred mainly to revenue generation, business growth, job creation, and financial viability. For many founders, economic value remained essential because it enabled the continuation and scaling of the venture. As one participant stated: “Well, of course, first of all, economic, we generate money and places of work, growth” (P1, Pulp and Paper Sector). Similarly, another founder noted: “It has a lot to do with money … if you go to investors, they want money, and they want to have a return on the investment and so on. (…) But yes, in the end, is money” (P10, Technology and Data Science Sector). Thus, economic value was a central outcome, but not the only one.
Relational stakeholder value referred to the positive effects generated for specific stakeholder groups through the venture's activities and relationships. This included value for customers through better products and solutions, for employees through meaningful work and collaboration, and for partners through trust, growth, and joint opportunities. As one entrepreneur explained: “I say value the first thing that comes to my mind is customer value (…) What you can create for your customer responding to its needs” (P6, Technology and Data Science Sector). Another founder described employee value in relational terms: “how we work together (…) value means to work with people you like. People who are somehow family for you after this time” (P1, Pulp and Paper Sector). A third participant summarized this broader perspective: I would say the value is to create a positive impact on more than just your bank account (…) Value is about creating some sort of positive influence for at least one stakeholder group, whether it's monetary, productivity-wise or else. (P9, Green Infrastructures Sector)
Sustainable value referred to environmental and social benefits that extended beyond direct economic returns or benefits accruing to specific stakeholder relationships, such as customers or employees. In the interviews, environmental and social dimensions were often closely intertwined rather than clearly separated. Entrepreneurs described reducing emissions, improving waste management, supporting healthier lifestyles, and contributing to societal well-being in overlapping ways. For this reason, we interpret these outcomes jointly as sustainable value. As one participant explained: “Then of course the more people ride bicycles … the fewer the emissions (…) that is also a value for the planet” and “We optimize the infrastructure of cities and the transport of the cities … creating also a healthier life for people” (P8, E-vehicles and Transportation Sector). This category aligns more closely with the Special Issue theme because it reflects the co-creation of ecological and societal benefits through entrepreneurial activity.
Innovation value referred to the development of new technological and knowledge-based capabilities that enabled the venture to solve problems and create future benefits. The interviews showed that technology was rarely valued as an end in itself. Rather, founders emphasized the importance of know-how, R&D, and the ability to generate new solutions. As one participant stated: “Value is the solution that we come up with to solve the problem” (P5, Technology and Data Science Sector). Another added: “One value for our company is all the research we have done and the level of know-how that we have achieved so far” (P2, Technology and Data Science Sector). We therefore interpret this dimension not as technological value in a narrow sense, but as innovation value: the value derived from building problem-solving and knowledge-based capabilities that support later economic, stakeholder, and sustainable outcomes.
Measuring success
Interviewees also referred to success in different ways. They did not define success uniformly, but linked it to the value outcomes they prioritized. Some relied mainly on financial indicators such as turnover and sales. One founder stated: “I measure the success of the company with the turnover, of course. If the product is good, you will sell something and you will get revenue” (P1, Pulp and Paper Sector). Others emphasized stakeholder interest and external recognition: “We see the interest. People really understand the mission, and they are really convinced by this vision (…) I think we can measure the success with the general interest we see in what we are doing” (P4, Food Sector). Another added: “As I said, we have received a good amount of funding for our technology, development, and infrastructure expansion … that means that there is a general interest in what we do, so there are prospects of growth” (P3, Food Sector).
Environmental impact was another success metric for some founders. One entrepreneur explained: “For me, the success of the company will be measured in the footprint that I will be able to make … or let's say the footprint, ecological footprint, that I will be able to minimize with my startup” (P8, E-vehicles and Transportation Sector). Another described using non-financial KPIs: “We want to use to measure the success or the financial KPIs, but also non-financial KPIs, for example, how much waste is going through our platform? And how much of that waste is being recycled?” (P6, Technology and Data Science Sector). Technological progress was also cited as a success indicator: “technical measurement … that is, basically, what we can do. What can our product do? What are the main characteristics of the product? Why is the product a good product compared to the others we have in the market?” (P1, Pulp and Paper Sector). Taken as a whole, success in green start-ups was multidimensional and closely linked to the forms of value founders considered most important (Kuckertz et al., 2019).
Future prospects and challenges
The final finding concerned how entrepreneurs viewed the future development of their ventures. Interviewees expressed strong ambitions to grow, scale, and extend their impact, but they also described significant constraints that could hinder these ambitions.
Most founders linked future prospects to growth. This included growth in sales, team size, market reach, and implementation capacity. One participant stated: “In the long term, we want to grow and scale to the European market” (P6, Technology and Data Science Sector). Another explained: “I think our future prospects are to grow. Grow at the team level up to a certain level. Still, we want to double the number of our employees” (P2, Technology and Data Science Sector). The same participant added that this growth meant tangible financial outcomes: “get results on sales and turnover” (P2, Technology and Data Science Sector). Growth was usually framed in both economic and sustainability terms. As one interviewee put it: “I hope that we can achieve our goals. That we can have a successful startup. So, both on the one hand on the economy but also on the other hand on sustainability, on the ecology” (P10, Technology and Data Science Sector). In other words, growth was not an end in itself but a means to achieve dual objectives.
Several entrepreneurs also referred to future innovation and technological development, often supported by ongoing research and development efforts. They wanted to improve existing solutions, expand into new domains, and address additional problems over time. As one participant noted: “We see a lot of problems, problems and challenges popping up in the industry and the society, and we have a lot of ideas” (P6, Technology and Data Science Sector). What this reveals is that future prospects were closely linked to the continued development of innovation value.
At the same time, interviewees described substantial challenges. This included scaling production, attracting customers, securing funding, dealing with regulatory approval, and updating offerings in line with market expectations. In some sectors, such as food, approval processes represented a direct barrier to commercialization. More broadly, founders often faced resistance from established industries and conservative market actors. One entrepreneur explained: One of the main challenges we will need to handle from the beginning … is that the industry we're targeting, I mean, the waste management industry, is rather conservative. (…) to get our new ideas into this conservative old industry, that will be challenging. (P6, Technology and Data Science Sector)
Viewed from this perspective, the continuation of sustainable value co-creation depends not only on entrepreneurial motivation and stakeholder engagement but also on overcoming structural barriers related to scale, regulation, finance, and industry resistance. Accordingly, the future of green start-ups is shaped by both their internal capabilities and the openness of their surrounding ecosystems to sustainability-oriented change.
Figure 2 visually organizes these findings, illustrating how opportunity recognition and entrepreneurial goals shape strategic responses and stakeholder configuration, which together drive sustainable value co-creation with different stakeholder groups (natural environment, society, employees, customers, business partners, and other stakeholders). These co-creation processes result in four types of value outcomes: economic value, relational stakeholder value, sustainable value, and innovation value. For instance, environmental problems recognized as opportunities can lead to sustainability-oriented goals, informing stakeholder-focused strategies and partnerships that deliver sustainable and relational value to society and the natural environment.
Sustainable value co-creation mechanisms in green start-ups.
Discussion and conclusion
This study explores sustainable value co-creation mechanisms within green start-ups, contributing to the development of a more sustainable and resilient economy (Sadma, 2021). We define sustainable value co-creation as the process through which green start-ups and their stakeholders collaboratively generate economic, social, and environmental benefits through ongoing interaction, feedback, and adaptation. Our findings reveal that value co-creation in green start-ups begins at the inception of these ventures, as entrepreneurs establish sustainable businesses to address socio-environmental challenges in collaboration with key stakeholders (Han et al., 2023). This process unfolds through strategy formulation and implementation, which are deeply rooted in the assessment of available resources and stakeholder needs (Ormiston and Seymour, 2011). Accordingly, our findings extend existing research on sustainable value co-creation, which has largely focused on established firms or specific contexts such as B2B markets or bottom-of-the-pyramid settings (Brown et al., 2024), by offering a process-oriented explanation of how such co-creation unfolds in early-stage entrepreneurial ventures.
A key insight from our analysis is the dynamic, iterative nature of sustainable value co-creation in green start-ups, characterized by continuous learning and communication with stakeholders (Brown and Pattinson, 2024). This ongoing dialogue enables green start-ups to understand stakeholder requirements, adapt their strategies, and co-create value with a broad range of stakeholders, including customers, employees, business partners, society, and the natural environment (Bridoux and Stoelhorst, 2016; Kujala et al., 2022). Our analysis identifies four distinct types of co-created value: economic value (e.g. revenue, growth, and jobs), relational stakeholder value (e.g. customer satisfaction, employee well-being, and partner trust), sustainable value (e.g. environmental and social benefits), and innovation value (e.g. know-how, R&D, and problem-solving capabilities). Figure 2 illustrates these mechanisms, showing how opportunity recognition and entrepreneurial goals shape strategic responses and stakeholder configuration, which together drive sustainable value co-creation with different stakeholder groups, resulting in these four types of value outcomes.
Theoretical contributions
This study makes important contributions to the literature on sustainable business models, social and sustainable entrepreneurship, and stakeholder theory, offering new insights into the mechanisms of sustainable value co-creation in green start-ups. This also aligns with calls to better account for the contextual embeddedness of entrepreneurial activity (Jones et al., 2019), which our findings address by situating value co-creation within stakeholder-rich environments.
First, our research advances the sustainable business model literature by demonstrating how green start-ups operationalize sustainable value co-creation through circular business models that address socio-environmental challenges (Aarikka-Stenroos et al., 2022; Bocken et al., 2014; Schaltegger et al., 2016). While prior research has focused on established firms transitioning to sustainability (e.g. Bocken et al., 2014), our study highlights the unique role of green start-ups as born-sustainable ventures that co-create value with stakeholders from inception. We show that sustainability is not an add-on but a foundational contextual condition shaping reciprocal value co-creation processes (Hoogendoorn et al., 2019). Specifically, our findings reveal how green start-ups align their strategies with socio-environmental goals, integrating resource assessment and stakeholder needs to co-create economic, environmental, and social value simultaneously. This extends the prior research by illustrating how entrepreneurial innovation in green start-ups contributes to sustainable value co-creation, offering a nuanced understanding of the interplay between sustainability, entrepreneurship, and co-creative value activities (Raha and Windsperger, 2026).
Second, we contribute to the sustainable entrepreneurship literature by elucidating the dynamic processes through which green start-ups pursue opportunities to address socio-environmental challenges through stakeholder value co-creation (Dean and McMullen, 2007; Hoogendoorn et al., 2019). Our findings show that green start-ups engage in what we term “co-creative entrepreneurial adjustment”—a continuous learning process involving stakeholder feedback loops (e.g. trial periods with consumers and partnership collaborations) to refine strategies, operations, and products. This iterative co-creation process not only enhances value creation but also positions green start-ups as key actors in driving sustainable economic transitions. By mapping these processes (as shown in Figure 2), our study provides a comprehensive framework for understanding how sustainable value co-creation manifests in practice, particularly in the context of green start-ups (Cohen and Winn, 2007).
Third, our study contributes to stakeholder theory (Chowdhury et al., 2024) by highlighting the dynamic, reciprocal nature of stakeholder engagement in sustainable value co-creation within green start-ups. While stakeholder theory emphasizes the importance of managing stakeholder relationships for value creation, our study reveals how green start-ups actively co-create value with stakeholders through continuous communication and adaptation (Bridoux and Stoelhorst, 2016; Kujala et al., 2022). Specifically, our findings extend stakeholder theory by demonstrating that green start-ups treat the natural environment and society as legitimate co-creation partners, not merely as external beneficiaries or constraints. For instance, feedback loops with customers and employees enable green start-ups to align their strategies with stakeholder interests, while partnerships with research institutes and business partners drive innovation and scaling. This results in a holistic sustainable value co-creation mechanism that encompasses economic, relational stakeholder, sustainable, and innovation value (Harrison and Wicks, 2013). Our study thus demonstrates how green start-ups serve as a novel context for understanding sustainable value co-creation, particularly in sustainability-driven ventures where stakeholder engagement is both a strategic necessity and a driver of innovation.
Practical implications
Beyond its theoretical contributions, this study offers practical implications for various stakeholders, including entrepreneurs, investors, policymakers, and the broader business community.
Entrepreneurs and founders of green start-ups may leverage our findings to better initiate and sustain sustainable value co-creation by aligning their mission with socio-environmental challenges from the outset, maintaining continuous communication with stakeholders, and iteratively adjusting strategies based on feedback (Garriga, 2014). Specifically, our findings suggest that entrepreneurs should explicitly identify and engage with a broad range of stakeholders—including the natural environment and society as legitimate stakeholders—to unlock the full potential of value co-creation.
Investors and venture capitalists can use these insights to make informed decisions, identifying green start-ups with strong stakeholder engagement and coherent value measurement as promising investment opportunities. The four value types we identify (economic, relational stakeholder, sustainable, and innovation) offer a framework for evaluating start-up performance beyond traditional financial metrics.
Policymakers can foster supportive ecosystems by incentivizing stakeholder engagement, promoting innovation, facilitating access to resources, and reducing regulatory barriers (e.g. approval processes in the food sector). Policies that encourage partnerships between green start-ups and research institutes or established firms may be particularly effective in accelerating sustainable value co-creation.
Limitations and future research
This study offers valuable insights into the sustainable value co-creation mechanisms of green start-ups; however, several limitations should be acknowledged. These limitations also point toward promising avenues for future research.
First, the study focuses on green start-ups operating in Austria. While this provides rich contextual depth, it also highlights the potential role of unique cultural and institutional dynamics (Thornton et al., 2011). Future research could extend our findings by exploring how sustainable value co-creation varies across different countries and regions with differing regulatory, cultural, and market conditions.
Second, the study captures a snapshot of green start-ups at particular stages of development. Most ventures in our sample were in early stages, with limited employees and narrow stakeholder ecosystems. Given the dynamic nature of the business environment, the study's conclusions may reflect a particular moment in time (Kuratko et al., 2015). Longitudinal studies could enrich this work by examining how sustainable value co-creation mechanisms evolve as ventures grow, scale, and encounter new stakeholder relationships over time, particularly as they transition from early-stage to growth-stage enterprises.
Third, our analysis relies primarily on the perspectives of entrepreneurs and founders. While this provides rich insights into how value co-creation is initiated and managed, it does not capture the full experiences and expectations of other stakeholders (e.g. customers, employees, partners, and society). Future research could broaden the scope by incorporating views from multiple stakeholder groups—such as customers, employees, business partners, investors, and policymakers—to provide a more comprehensive, multi-directional understanding of sustainable value co-creation in green start-ups.
Fourth, our study focuses exclusively on green start-ups. While this provides depth and contextual richness, it remains unclear whether our findings apply to other types of sustainable ventures (e.g. social enterprises, cooperatives, or sustainability-oriented small and medium enterprises). Comparative studies across different venture types would help establish the boundary conditions of our framework.
Fifth, future research could examine the causal relationships between specific stakeholder engagement practices and the four types of value outcomes we identified. For example, do partnerships with research institutes lead primarily to innovation value, while customer feedback loops generate relational stakeholder value? Such questions remain open for further investigation.
Footnotes
Acknowledgements
This research was not financially supported by any specific grant from public, commercial, or not-for-profit funding agencies.
Funding
The authors received no financial support for the research, authorship, and/or publication of this article.
Declaration of conflicting interests
The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.