This paper investigates the entrenchment of de facto Responsible Innovation (RI) among early-stage ventures, whose innovation practices align with RI principles despite inexposure to prescriptions from RI discourse. In order to reveal the drivers of early-stage ventures’ de facto RI practice we conduct a qualitative, grounded single-case study of a social/environmental impact-orientated Venture Capital fund (impact VC) along with its portfolio ventures, investors and peers. We subsequently illustrate a process model which captures the orchestrating role of impact VCs in positively selecting for, aligning incentives towards, and setting up accountability mechanisms which entrench de facto RI practices among ventures in their portfolio. We further theorise that these orchestrating activities collectively serve to align the financial and non-financial interests of actors throughout the innovation value chain, creating the conditions which incentivise and enable ventures to pursue exceptional commercial and social/environmental performance simultaneously. This paper contributes to the literature on Responsible Innovation and Venture Capital, generating critical insights for practitioners and policymakers seeking to promote market-based solutions to social or environmental challenges.
