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<p>This study investigates how the cultural value of individualism affects founders’ ownership and control of their social startups. We analyzed 6,408 social startups based in 75 countries. Contrary to prevailing focus on the <i>egoism</i> element of individualistic cultures in the literature, the findings demonstrate that a culture of individualism is positively and significantly associated with the degree of outside ownership (or control) of a social startup. We argue that this effect occurs through two interrelated but under-specified elements of individualistic cultures, i.e., <i>universalism</i> and <i>voluntarism</i>. Moreover, we find that while 60% of the effect of individualism on outside ownership is mediated through angel investments, only 9% of the effect is attributable to venture capital. The findings have implications for research on cultural influences on ownership structures, entrepreneurial finance, and social entrepreneurship.</p>

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The individualism paradox: how individualistic cultures foster outside ownership in social startups

  • 期刊论文

  • 发表日期：

    2025年4月3日

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  • Ikenna Uzuegbunam

摘要

This study investigates how the cultural value of individualism affects founders’ ownership and control of their social startups. We analyzed 6,408 social startups based in 75 countries. Contrary to prevailing focus on the egoism element of individualistic cultures in the literature, the findings demonstrate that a culture of individualism is positively and significantly associated with the degree of outside ownership (or control) of a social startup. We argue that this effect occurs through two interrelated but under-specified elements of individualistic cultures, i.e., universalism and voluntarism. Moreover, we find that while 60% of the effect of individualism on outside ownership is mediated through angel investments, only 9% of the effect is attributable to venture capital. The findings have implications for research on cultural influences on ownership structures, entrepreneurial finance, and social entrepreneurship.