Sustainable Entrepreneurial Process in the Deep-Tech Industry

Abstract

To date, deep-tech entrepreneurship and sustainable entrepreneurship are both attracting the interest of researchers. Indeed, deep-tech is being employed to address future sustainable challenges in the present. Nevertheless, the process of deep-tech startups is filled with distinct obstacles. These types of startups may necessitate a more targeted sustainable entrepreneurial process and specialised knowledge compared to conventional technological startups or general sustainable entrepreneurial processes. Currently, most publications discuss either a sustainable entrepreneurial process or conventional technical startups. Therefore, this article aims to investigate the process of sustainable entrepreneurs as they transition from startup ventures to scaleup enterprises within the context of the deep-tech industry. Based on previous sustainable entrepreneurial processes, a multiple case study was conducted within six deep-tech startups, using a narrative progress research strategy, to find the sustainable process pattern. A conceptual model of a sustainable entrepreneurial process in deep-tech industry is established, including five phases with six activities: (i) Sustainable idea definition; (ii) Sustainable opportunity recognition and evaluation; (iii) Venture launch; (iv.i) Sustainable products/services development; (iv.ii) New sustainable enterprise financing; and (v) Sustainable enterprise scaleup. This process enables sustainable deep-tech entrepreneurs, policymakers, and financial investors to necessarily have an overview of the key entrepreneurial stages to navigate from the startup to the scaleup process.

1. Introduction

International competitive advantages are no longer primarily determined by comparing countries’ revenues. Sustainability, technology, and digital competitiveness are also impacted [1]. The transition to the digital economy has resulted in the emergence of a new type of entrepreneur with distinct characteristics. Sustainable entrepreneurship provides innovative solutions that align with triple bottom line values, tackle traditional societal and environmental challenges [2,3], and reach sustainability [4].

Notwithstanding the increased focus of scholars, policymakers, practitioners, and the media on sustainable entrepreneurship, the empirical concept remains nascent. A sustainable entrepreneurial process (SEP) is critical for practical applications in understanding sustainable entrepreneurship beyond academic research [5]. There scholarly study on the sustainable entrepreneurship process is limited [6], since process research requires a thorough assessment of complexity over a long-term period [5,7,8]. Additionally, there is an absence of customised SEPs that are specifically designed for a specific industry [8], specifically the technological industry.

The concept of sustainable entrepreneurship has progressed from a mere abstract idea to a pressing and practical necessity [9]. There have been several significant factors contributing to this transformation, such as climate change, human security concerns, resource scarcity, environmental degradation, and economic instability [9,10]. Within that, a deep-tech startup is promising to address sustainable issues.

Deep-tech enterprises frequently combine several technological innovations into a disruptive solution in fields such as healthcare, sophisticated robotics, clean-tech, or energy storage [11]. Regardless of the sector in which they operate, 97% of deep-tech companies develop products that address critical issues confronting humanity and the Earth, such as climate change, disease, and food scarcity [12,13], and contribute to the Sustainable Development Goals (SDGs) [14,15]. The Boston Consulting Group report has identified over 8600 deep-tech companies globally, and these startups are playing a crucial role in addressing various United Nations’ SDGs [13]. Notably, they are making significant contributions to SDG 3 (good health and well-being, 51%), SDG 9 (industry, innovation, and infrastructure, 50%), and SDG 11 (sustainable cities and communities, 28%).

Compared to a digital startup, a deep-tech venture has a high barrier to entry [11], because it has a longer research and development process [16], a higher initial investment cost, and fewer successful organisations in this field to reference [11]. They are usually founded by highly skilled entrepreneurs with PhDs or postgraduate degrees [17]. This distinguishes deep-tech startups from traditional digital startups [18]. Starting a deep-tech business can be challenging [19]. The failure rate of deep-tech ventures is therefore 90% or higher due to those traits [20,21].

Our exploratory research reveals entrepreneurs creating deep-tech innovations to address significant sustainability concerns. However, it does not merely involve the development of innovation; it also encompasses the processes of entrepreneurial opportunity generation and recognition. This article focuses on the activities that occur throughout the startup and scaleup process. In our research, we define deep-tech sustainable entrepreneurship as startups that produce deep-tech solutions addressing social and environmental concerns and contributing to the SDGs. The research question posed is this: how do sustainable entrepreneurs generate ideas, recognise, develop, and exploit opportunities, as well as scale up the business in the context of the deep-tech industry?

This process provides the entrepreneur, who initiates a deep-tech venture to address sustainable issues, with a comprehensive understanding and guidance throughout the process of starting and scaling up the business. Entrepreneurship is the formation of a business with the goal of generating and extracting value [9]. Similarly, by developing deep-tech innovation, the startup aims to contribute to the SDGs. Considering the ultimate aims of the startup, this article adopts the prior SEPs as frameworks [5,7,8] for the study of deep-tech ventures. We anticipate that the process model will enhance the existing literature on sustainable entrepreneurship and the deep-tech industry.

The aim of this article is to explore how sustainable entrepreneurs transition from startup ventures to scaleup enterprises in the deep-tech industry. This process enables sustainable deep-tech entrepreneurs, policymakers, and financial investors to necessarily have an overview of the key entrepreneurial stages to navigate from the startup to the scaleup process.

The remainder of this paper is organised as follows: Section 2: Literature review, Section 3: Research methodology, Section 4: Results, Section 5: Discussion, and Section 6: Conclusions.

2. Literature Review

The study examines the research on the intersections between sustainable entrepreneurship, the entrepreneurial process, and deep-tech startups (see Figure 1). The literature review begins with sustainable entrepreneurship. Second, the literature background of entrepreneurial processes and sustainable entrepreneurial ventures is presented. Third, deep-tech startups and how they contribute to SDGs are discussed.

2.1. Sustainable Entrepreneurship

Sustainable entrepreneurship represents the integration of aspects from both sustainability and entrepreneurship. It is defined as the process of identifying, developing, and using opportunities for (future) products and services that both support the preservation of the natural and social environment and generate economic and non-economic benefits for others [22]. Sustainable entrepreneurship integrates sustainability into the enterprise’s strategy and model to meet ecological, social, and economic goals [23,24] and to create long-term value for the enterprise, its stakeholders, and the larger society. A successful sustainable entrepreneur achieves economic performance and demonstrates adherence to social and environmental objectives [7,25]. Researchers largely consider the triple bottom lines, which include the economic line, environmental line, and social line [26], to be crucial goals that sustainable companies should strive for [27,28,29,30,31,32].

The environment line refers to the ability to preserve and protect essential elements of the natural environment [33]. Environmental sustainability entails the responsible management and preservation of natural resources to fulfill the requirements of present and future generations [34]. The term social line refers to the recognition and efficient control of both the positive and negative impacts that a company has on individuals [9]. The success of a sustainable enterprise is significantly dependent on the establishment and the engagement with employees, supply chain partners, customers, and local communities [35]. Lastly, the most important factor for a startup is its economic line, an essential determinant [36]. The achievement of corporate finance success is critical for a company’s continued viability and growth, as it is essential to maintain a stable income that does not exceed expenses [37].

2.2. Entrepreneurial Process and Sustainable Entrepreneurial Process

Numerous researchers have outlined the various steps or actions necessary for the development of entrepreneurial activities, presenting them as an entrepreneurial process [38,39,40]. The process of identifying new entrepreneurial opportunities and transforming them into reality consists of various stages. For instance, Shane and Venkataraman [39] defined the entrepreneurial process as encompassing the identification, recognition, evaluation, and exploitation of opportunities. In relation to sustainable entrepreneurship, we found several empirical studies that investigated in the identification, recognition, evaluation, and exploitation of sustainable opportunities [5,7,8,41,42,43]. Among these, three empirical studies stand out [5,7,8].

Choi and Gray [7] analysed 21 entrepreneurs in the food, fashion, and biotechnology industries, who have successfully implemented sustainable practices. Their research demonstrates that the most sustainable entrepreneurs come from unique backgrounds, employ non-traditional sources of funding, and apply unconventional yet successful human resource management strategies. Sustainable entrepreneurs manage their companies differently from startup to exit. Entrepreneurship involves five key stages: recognition of an opportunity, assembly of resources, launching the venture, managing growth, and harvesting the business. However, they analysed established companies such as Migros and Patagonia, focusing on seizing opportunities rather than discovering them. Their primary discovery is that the majority of successful businesses are in the highest market segment. This allows them to transfer the expenses of sustainable enterprises to customers and manage the economic, social, and environmental lines.

Belz and Binder [8] recommended that sustainable entrepreneurs start a business up gradually to optimise the process and preserve resources. The research analyses four case studies and outlines the six phases of the SEP: recognising a social or environmental opportunity, developing a double line solution, developing a triple bottom line solution, funding and forming a sustainable enterprise, and creating or entering a sustainable market [8]. The study reveals a gradual incorporation of the triple bottom line. The authors indicated that further research is required to comprehend this phenomenon. Also, the research does not provide a clear explanation of how entrepreneurial activities contribute to the sustainable goals.

Matzembacher et al. [5] conducted a study involving eleven organisations from six countries and diverse sectors, including both for-profit and not-for-profit enterprises. The results pertain to sequential activities that occur in the SEP, including idea generation, opportunity recognition, opportunity development, venture launch, and positive impact. The SEP ends only when it generates a positive impact. Similar to the Belz and Binder [8] process, the integration of sustainability dimensions does not occur simultaneously or prior to venture launch. Therefore, according to the researchers, misclassifications may result from assuming that the process is complete during the venture launch phase.

We selected the Belz and Binder [8] process model and the Matzembacher et al. [5] process model to establish an appropriate literature background for research analysis. Firstly, both process models incorporate for-profit ventures, which makes them particularly suitable for deep-tech ventures. Second, Matzembacher et al.’s model [5] showcases the latest developments in SEPs. This model addresses the limitations of prior approaches to SEPs. However, the process does not focus on the funding stage, which is vital for a deep-tech venture. Therefore, a combination of both SEPs [5,8] would bring more completion in the deep-tech context.

2.3. Deep-Tech Startup

A deep-tech startup is a scientific-driven organisation focused on generating technological [44] and engineering breakthroughs [19,45]. Deep-tech startups encompass a wide range of specialised fields [46], such as artificial intelligence (AI) [47], the Internet of Things [48], supply chain and blockchain [49], biotechnology [50], nanotechnology [51], photonics, electronics, medical technologies [52], quantum computing [53], robotics, agriculture technologies, and autonomous technologies [13]. Deep-tech organisations have “the potential to dominate the future in many ways” [54]. A successful deep-tech business gathers a diverse group of individuals, including scientists, engineers, and entrepreneurs, to collaboratively address significant and fundamental challenges [13] and untapped market needs [55]. This is demonstrated by the fact that 97% of deep-tech ventures contribute to at least one of the United Nations’ SDGs [13]. Sting asserts that a deep-tech startup must employ innovative, hard-to-replicate, and distinctive technology to tackle a significant SDG-related problem [56].

Deep-tech innovations involve a combination of sophisticated software and innovative hardware, making them more challenging than their software-driven counterparts [17,57,58]. Deep-tech primarily concentrates on utilising scientific discoveries or technical breakthroughs to transform theoretical possibilities into practical applications. The deep-tech startup prioritises the redefinition of limits and reshaping of established paradigms rather than simply improving existing technologies [15]. Deep-tech firms, in contrast to many digital startups, require extensive, expensive, and sequential development cycles rather than employ lean strategies of fast and iterative development cycles [16,17,59]. These unique characteristics of deep-tech startups differentiate them from regular tech startups.

3. Research Methodology

3.1. Multiple Case Study Design

The study applied the narrative strategy to multiple case studies to analyse the fundamental essential phases of an SEP and identify recurring patterns in the sequence of events. By applying Yin’s research strategy framework [60], we analysed an SEP over a long period of time. The researchers had limited control over the actual behavioural events documented in the article, such as identifying a sustainable idea, identifying a sustainable opportunity, evaluating its feasibility, product development, obtaining funding, and creating sustainable value. Based on Yin’s framework, the multiple case study technique was the most suitable approach for developing an SEP. In previous research on SEPs, a multiple case study approach was also utilised [5,7,8].

The case studies were chosen based on certain criteria, such as the startups’ introduction of products or services to the market and the size and maturity of the segment [61]. The products/services provided by selected case studies were classified into several fields such as artificial intelligence (AI) [47], the Internet of Things [48], quantum computing [53], robotics, and autonomous technologies [13]. The most significant factor was the firm’s demonstration of social or environmental values in vision and mission. The crucial benchmark within the market segment was the introduction of new products or services, which was supported by external financing sources [62].

Table 1. Description of selected case studies.

Enterprise	Year of Established	Fields	Founder	Product/Services Offered	Triple Bottom Lines Value
Enterprise A	2015	Recycling	Dr. A1	AI sortation to modernise the recycling infrastructure	Economics Environment Societies
Enterprise B	2017	Heating, ventilation, and air conditioning (HVAC)	Founder B1 Founder B2	Cloud-based computing, algorithms to maximum energy efficiency	Economics Environment
Enterprise C	2013	Energy	Founder C1 Founder C2	SaaS platform to access and manage energy performance	Economics Environment
Enterprise D	2016	Automation	Founder D1 Founder D2 Founder D3	Autonomous driving solution for trucking to make driving safer	Economics Environment Societies
Enterprise E	2015	Automation	Dr. E1	AI to improve safety of commercial and autonomous fleets	Economics Societies
Enterprise F	2018	Security	Founder F1 Founder F2	AI to enhance surveillance system and reduce potential violations	Economics Societies

outlines the selection and independent labelling of six case studies in accordance with the requirements.

The sustainable deep-tech enterprises served as the basis for analysis. The study’s validity was enhanced by incorporating deep-tech firms from various fields (recycling, HVAC, energy, automation, and security) and countries (the United States, Canada, and France). A wide range of sustainable deep-tech firms contributed to more robust research [63].

3.2. Process Research Strategy

A thorough analysis was carried out by Langley [6] to evaluate the effectiveness of different approaches in interpreting process data. The evaluation focused on factors such as generalisability, simplicity, and precision [64,65]. This study utilised a narrative strategy to collect and analyse data. The narrative strategy is often seen as a crucial element in the process of creating meaning within businesses. Strategic practices naturally encompass various layers and forms of storytelling [66]. The utilisation of narrative technique in research is known for its high level of accuracy, although it may introduce complexity and limit generalisability [6].

3.3. Data Collection

We collected primary sources of information from search engines like Crunchbase, Google, Emerging Markets research, data, and news, as well as the Pitchbook. We primarily sourced information from Crunchbase and verified it with other search engines. The objective was to enhance the accuracy and reliability of the data. The Crunchbase database offers comprehensive board information about startups globally [67], including up-to-date data and covering diverse financial funding details [68]. This database is utilised by scholars [17], non-governmental organisations (NGOs), and professionals in various industries [67,68,69]. It provides longitudinal data, which fits the aim of the article.

The search terms used included not just the names of the organisations, but also the names of their founders and co-founders. The secondary data consisted of a wide variety of sources related to the sustainable entrepreneurship process. These sources included a company’s website, blog posts, press releases, videos, founders’ speeches, social media platforms, and print media. Once acquired, the data that were recently collected were imported into the database and then standardised in the spreadsheet.

3.4. Data Analysis

A process is a sequence of events that charts throughout time [70]. Looking at it from this perspective, process research focuses on analysing events. These events are typically non-routine, collective, and public acts that signify a shift from one system or time state to another [71]. Once the events were identified, they were coded and systematically categorised into event types to find themes and patterns [6]. Event types were defined based on prior SEPs (see

Table 2. Proposed event types.

Event Type	Definition	Reference
Technical background	Highly qualified entrepreneurs (PhDs or postgraduates) or those with intensive technological knowledge are involved.	[17]
Sustainable idea definition	This results from entrepreneurs’ awareness and experience in terms of sustainable (social and/or environmental) problems.	[5,8]
Sustainable opportunity recognition and evaluation	The entrepreneur perceives an opportunity from market imperfection and balancing between expected economic outcomes and social and/or environmental results.	[5,29]
Sustainable products/services development	Entrepreneurs develop business models, sustainable visions, and missions, developing prototypes or beta versions.	[5,8]
Venture launch	A sustainable vision and mission form an identical new venture. A new product or service is launched.	[5]
Financing sustainable new venture	Financing the startup is crucial for a new venture to achieve sustainable values instead of profitability.	[7,8]
Sustainable enterprise scales up	The enterprise creates value for society and/or the environment as well as for the economy.	[5]

) [5,8]. To increase the reliability of event type coding, inter-coder reliability experiments were conducted between two independent coders [72,73].

Once events were coded into event types, a cross-case study analysis was carried out to identify repeating patterns, construct conceptual frameworks (Appendix A), and explore similarities and differences in the collected data. Finally, we conducted a thorough review of the existing literature to validate and analyse the sequential order of the process.

4. Results

The analysis results show that a technological background is crucial for sustainable deep-tech entrepreneurs. An SEP in the context of the deep-tech industry includes five phases with six activities: sustainable idea generation, sustainable opportunity recognition and evaluation, venture launch, sustainable deep-tech development, sustainable enterprise financing, and finally scaling up the sustainable enterprise.

4.1. Technological Background

The analysis of six case studies revealed that all the founders possessed technical expertise prior to embarking on their entrepreneurial endeavours. Dr. A1, a founder of the Enterprise A team, holds a degree in Control and Dynamic Systems and possesses extensive expertise in algorithm development and AI. Founder B1, a founder of Enterprise B, holds a bachelor’s degree in Industrial Engineering and possesses substantial proficiency in technology. Founder B2, Enterprise B’s co-founder and partner, has demonstrated exceptional leadership skills in various industries and made substantial contributions to the company’s growth initiatives. According to the Enterprise C case study, Founder C1 holds a Life Science and Cleantech Engineering degree and has accumulated fourteen years of professional experience as a consultant with a specialisation in cleantech and energy efficiency. Founder C2 brought the expertise in the energy service sector to the partnership. As per the Enterprise D case study, the three co-founders have earned doctoral degrees in Engineering and additional expertise in the technology sector. Without prior technological knowledge, Founder F1 hired Founder F2 as a co-founder of Enterprise F, who brought a four-year background in AI development and implementation. Dr. E1, the founder of Enterprise E, holds a doctor of philosophy degree in Cognitive Science or Artificial Intelligence from Stanford University.

4.2. Sustainable Idea Generation

The majority of the examined case studies revealed that the initial stage of the sustainable entrepreneurship process involves the generation of a sustainable idea. This study analysed six case studies to identify three key factors that contribute to the definition of a sustainable concept in the deep-tech context: individual enthusiasm for technology and scientific innovation, field expertise, and the recognition of sustainable deficiencies.

Firstly, a sustainable idea is defined by a combination of personal interests in technology, scientific research, and the recognition of sustainable gaps. A passion for technological advancement drove the founder of Enterprise A to improve the efficiency of the waste recycling process. Then, Dr. A1 worked together with the Closed Loop Fund and the Carton Council to gain a deep understanding of the industry. The founders of Enterprise D were fascinated by the enormous potential that AI held for making substantial contributions to both the economy and society. They made a firm decision to allocate resources towards autonomous driving technology after conducting a thorough evaluation. In the Enterprise E case study, a profound desire to advance uniqueness and innovation for the benefit of future generations drove Dr. E1. Therefore, Dr. E1 conducted a research study and came to the conclusion that investing in an autonomous business was a wise decision.

Second, the generation of ideas is based on the founder’s knowledge of a certain field and recognition of sustainable gaps. During Founder B1’s experience in the HVAC industry, it became evident that the HVAC system consumed around 50% of energy usage. Enterprise B’s founders believed that technology and AI could effectively address energy usage in building infrastructure. Similarly, Enterprise C’s founders investigated the impact of manufacturing on global carbon dioxide emissions, which account for 20% of the total. After gaining a deep understanding of the subject matter, the founders dedicated themselves to developing a comprehensive system to save energy for manufacturing.

Lastly, the founder’s experience in identifying sustainable gaps forms the basis for the generation of ideas. Founder F1 consistently expressed deep concern about the issue of rising gun violence in the home country, South Africa. Recognising the alarming increase in gun violence in the United States, Founder F1 identified the potential for technology to play a crucial role in saving lives during active shooting incidents.

4.3. Sustainable Opportunity Recognition and Evaluation

Within the context of the deep-tech industry, the differentiation between sustainable opportunity recognition and sustainable opportunity evaluation is still unclear. The identification and evaluation of sustainable opportunities form the next phase in the sustainable entrepreneurship process. There are two distinct patterns when it comes to identifying and evaluating sustainable opportunities. One involves innovative technologies that can solve environmental and/or social problems while also considering market values. The other focuses on prioritising sustainable values throughout the entire process.

Firstly, the entrepreneur holds a strong belief in the potential of market size and the ability of favourable and differentiated technologies to drive firm growth. After an extensive study on sustainability gaps and evaluating the available products on the market, the founders of Enterprise B recognised significant shortcomings in the building sector. They believed that employing AI technology could effectively address these gaps. The prior entrepreneurial experience of Founder B2 was critical in evaluating the business’s long-term viability. The founders of Enterprise F conducted a research study to determine the needs of the security field and explored computer vision algorithms that may surpass human accuracy in detecting violations. With previous experience in AI sales and startups, Founder F2 assessed Enterprise F’s entrepreneurial opportunity. The founders of Enterprise D believed that AI innovation could significantly improve truck driving safety and bring benefits to the trillion-dollar commercial transportation industry. After conducting a study on the recycling industry and gaining extensive knowledge about the sustainability challenges, Dr. A1 then sought the counsel of two mentors who had distinct experience in industrial economics and startups. The consultation was crucial for Dr. A1 to define and evaluate the entrepreneurial opportunity.

Unlike the previous case studies, Enterprise C and Enterprise E’s primary priorities were contributions to sustainability over economic value. Founder C1 showed a strong understanding of the advancements in cloud computing and artificial intelligence, suggesting that using these technologies could help to enhance the global environment. Dr. E1 was heavily involved in various modelling activities to understand sustainable needs and allocated resources towards the development and implementation of driver assistance and driver management systems. Prior to the venture launch, there was no discussion about the economic line value in Enterprise C and Enterprise E.

4.4. Venture Launch

In six case studies, when the entrepreneur had gathered sufficient information and skills to make an informed decision about starting a new business, the next step involved the process of exploitation. This stage was characterised by the founders legally launching the firm as a legal entity, complete with an official name and a sustainable vision and mission.

4.5. Sustainable Product Development

The deep-tech industry has observed that sustainable product development and new enterprise funding, previously seen as occurring one after the other, now occur concurrently. It is also the longest stage of the sustainable deep-tech entrepreneurial process.

Enterprise A’s development began in 2014 with its initial concepts. Early 2015 saw the public unveiling of the prototypes in a controlled setting on a conveyor belt, following extensive testing and significant technological progress.

Enterprise B underwent an extensive design phase for its initial technology, which spanned nearly two years. In 2017, Enterprise B dedicated its efforts to advancing the technology. The year 2018 saw the introduction of an initial trial, followed by its implementation at two retail establishments. Enterprise B announced its innovative technology in May 2017, following the successful implementation of the algorithm. This technology was designed to enhance the self-sufficiency of buildings and provide environmental benefits.

In 2014, the team at Enterprise C developed an innovative application that revolutionised the way energy-saving opportunities were accessed. ArcelorMittal and Norske Skog quickly embraced the initial release of the system in 2015. Since then, the company has consistently collaborated with various partners and improved its technological infrastructure to meet changing requirements.

Enterprise D spent its early years developing a beta autonomous driving system. Between 2018 and 2021, Enterprise D conducted several tests and experiments, including driverless trials at Quingdao port and along the Silk Road. After undergoing thorough testing and successfully implementing the technologies in commercial pilot projects, the company gained the ability to adopt a large-scale production approach in 2021.

Enterprise F invested heavily in an 18-month AI training program. Enterprise F concentrated their efforts on enhancing technological advancements capable of reliably and consistently detecting weapons in surveillance camera footage. Enterprise F introduced enhanced features in October 2019 to detect and identify threats and intrusions.

Two years after launching the new venture, in April 2017, Enterprise E reached a significant milestone by introducing a driver attentiveness detection feature that incorporates video enhancement technology into the automotive industry. Following that, the company provided assistance to clients in improving fleet safety and continually adopted new features for collision prevention and safety automation, such as using AI to generate predictive collision alarms.

4.6. New Sustainable Enterprise Financing

Financing a new firm is a crucial entrepreneurial activity, similar to the product development stage. It happened concurrently with the product development phase.

Enterprise A secured funding from numerous sources after achieving favorable outcomes with the initial prototypes. As of November 2022, Enterprise A had effectively obtained USD 91 million from Series C fundraising. Enterprise A allocated the funds to allow the expansion of its company operations and bolster its ongoing activities in global expansion.

Enterprise B secured USD 12 million in funding in April 2020. Enterprise B used this funding to support the worldwide expansion of autonomous building technologies. Enterprise B reported in November 2021 that it had secured a USD 24 million investment. The purpose of this investment round was to facilitate the wider incorporation of AI technologies in the built environment and to offer financial support for the company’s upcoming phase of development.

In 2014 and 2015, Enterprise C received funds and non-equity investments from a variety of sources. Various investors provided EUR 2.7 million in initial financing in 2017. In 2018, an organisation invested non-equity in Enterprise C. By using the fund, Enterprise C was able to advance the technology to match each client’s energy progress. In December 2019 and 2020, Enterprise C received almost EUR 6.5 million that commenced its product development phase.

Enterprise D achieved a successful Series B financing round in February 2021, raising a total of USD 200 million. Enterprise D utilised the funds to accelerate the process of commercialising and implementing its autonomous mobility solutions. Subsequently, the company initiated a substantial expansion of its production activities and commenced the process of commercialising its technological innovation.

In 2018, Enterprise F successfully secured pre-seed funding from a diverse range of venture capital firms. In July 2019, Enterprise F raised USD 2.2 million from a capital fund and other investors. In April 2021, Enterprise F successfully raised USD 8 million through Series A fundraising. The organisation prioritised the advancement of its product line through the funding, resulting in substantial growth and a strong dedication to improving driver safety on a global scale.

During its initial year, Enterprise E relied primarily on self-funding and contributions from its dedicated founder and leadership team. A venture capital firm provided USD 2.85 million in initial funding in September 2015. Then, the startup raised USD 12 million in Series A funding in April 2016. The financial funding contributed to the product development phase. The startup raised USD 159,000 in Series B funding in July 2017. Capital helped the company to facilitate the innovative products, hire more people, and improve leadership. With the fund, Enterprise B has effectively run and continuously committed to worldwide driver safety.

4.7. Scaleup Sustainable Enterprise

In the final phase of the SEP, the startup enterprise achieved more assertive expansion and made significant contributions to the triple bottom line. During the research of cross-case studies, the enterprise repeatedly emphasised the importance of incorporating social and environmental values, rather than focusing solely on economic ones. The enterprises are expected to increase their profitability by optimising their social and environmental responsibilities.

Enterprise A demonstrated remarkable scalability by effectively detecting a significant number of over 66 billion objects, including more than 12 billion PET bottles. Enterprise B has had a substantial impact on a total area of 100 million square feet in commercial buildings across 70 global sites since its establishment, effectively cutting total energy usage by a maximum of 25% and reducing 20–60% carbon emissions. Enterprise C stated that integrating consumer data into its knowledge base could result in energy savings of up to 15%. According to Enterprise D, the introduction of D’s product had the potential to achieve a large 38% reduction in operational costs and a huge decrease in carbon emissions of around 1.1 million tonnes between 2021 and 2024. In the case study F, the consumer’s desire for enhanced security systems to mitigate social unrest, gun violence, and pandemic safety concerns significantly contributed to the enterprise’s tenfold growth by 2020. By 2019, Enterprise E had successfully penetrated the automobile markets in Asia, North America, and Europe. With real-time alerts, the technology advised drivers when they had entered dangerous areas or lost focus. This reduced accidents by 50%. Since its founding, the firm has helped the largest commercial fleets reduce over 70,000 collisions, saving about USD 300 million.

5. Discussion

5.1. Technological Background

According to Dealroom’s recent report [16], the deep-tech industry sometimes necessitates extensive research and development phases to effectively transform a specific technology component into a marketable solution. These enterprises are frequently led by highly trained entrepreneurs who hold advanced degrees such as PhDs [17,44]. Entrepreneurs in this category might be described as engaging in knowledge-intensive entrepreneurship [74], which includes the domains of science, technology, and innovation [17].

The analysis’s findings also suggest that entrepreneurs have engineering degrees, PhDs, or are currently engaged in academic research. Moreover, the six case studies consistently employ deep-technical solutions to address sustainability issues, leading to the development of business models that leverage these scientific and technological advancements. A recent industry report [16] also supports the conclusion. Following a comprehensive examination of six cases and extant theories, we formulate the following proposition:

Proposition 1. 

Sustainable entrepreneurship in the context of deep-tech industry starts reflecting on entrepreneurs’ technological knowledge and background.

5.2. Stage 1: Sustainable Idea Generation

Mets et al. [42] find that the entrepreneur’s historical background, motivation, prior knowledge, and talents or capabilities influence idea generation. Perrini, Vurro, and Costanzo [43] find a relationship between social empathy and the ability to generate sustainable ideas. According to Belz and Binder [8], the practical first step is to identify a social or ecological problem that the aspiring entrepreneur has personally or professionally encountered. Based on the individual’s technological knowledge and capabilities, they can perhaps suggest a solution for the described problems.

This study demonstrates the integration of previous research findings. Various aspects, including a personal interest in technology and scientific research, professional expertise, and the identification of sustainability gaps, influence the definition of sustainable ideas in the deep-tech industry, as revealed by the analysis of the cross-case studies. Consequently, we formulate the following proposition:

Proposition 2. 

Generation of sustainable ideas in the context of deep-tech industry comes from individual enthusiasm for technology and scientific innovation, expertise in the field, and the recognition of sustainable deficiencies.

5.3. Stage 2: Sustainable Opportunity Recognition and Evaluation

Four out of six case studies share similarities with traditional entrepreneurs, as the recognition of entrepreneurial opportunities in these cases is influenced by previous knowledge and the pursuit of personal advantages, particularly financial profit [75,76,77]. When engaging in sustainable entrepreneurship, it is crucial to use a thorough cost–benefit analysis when making decisions, while also utilising a collective sense of connectedness to a social or environmental cause. Perrini et al. [43] argue that the evaluation of social opportunities requires a thorough examination of both the possible long-term effects and the economic viability of the project. The opportunity evaluation is crucial, as it allows individuals to not only recognise possible opportunities but also efficiently exploit them while meeting client needs [78].

The Enterprise C and Enterprise E case studies support the conclusions of the previous study undertaken by Shepherd and Patzelt [29] and Matzembacher et al. [5]. Entrepreneurs often direct their attention towards sustainable gaps when they identify them as potential opportunities [6]. The entrepreneur believes that the opportunity is both feasible (based on their entrepreneurial expertise and self-confidence) and desirable (based on their motivational goals). Discovering a resolution to a challenge can also present a chance to introduce a new product or service into the market [5].

Identifying and evaluating sustainable opportunities involves finding a balance between the potential of technology to generate social line, environmental line, and economic line value for long-term sustainability. Opportunities in deep-technology are typically less risky than those in strictly digital fields. When tackling a fundamental issue that has often been overlooked for many years, there will inevitably be a demand [11]. Given the market’s limited availability and the complexity of technology, it is difficult to distinguish between opportunity recognition and evaluation.

The analysis results revealed that entrepreneurs’ expectations about economic advantages and social and environmental benefits play a significant role. Consequently, we formulate the following proposition:

Proposition 3. 

The recognition and evaluation of sustainability opportunities in the deep-tech industry arise from market imperfections and finding a balance between the social line, environmental line, and economic line, with the aim of creating long-term value for sustainability.

5.4. Stage 3: Venture Launch

After gathering sufficient information and experience, the entrepreneur proceeds to launch a new venture. In contrast to the first two stages of the SEP, which mostly focus on integrating innovative technologies, this step entails integrating a sustainable vision and mission into a new business. The founders intentionally integrated the environmental and societal impacts of deep-tech as both the goal and approach to meeting sustainable requirements, creating a unique market for themselves.

At this stage, the entrepreneur begins to put their ideas into action and takes the required measures to create a new business venture [79]. The outcome of the venture launch stage involves the establishment of the enterprise, which can also be seen as the act of taking advantage of sustainable opportunities [42]. Sustainable entrepreneurs differ from traditional entrepreneurs in that they do not prioritise profit as their primary goal [80]. Instead, they strive to create a new organisation that symbolises a goal focused on sustainability [43]. The case studies also place considerable emphasis on making a social and environmental impact on their visions and missions. Consequently, we formulate the fourth proposition as follows:

Proposition 4. 

Venture launch occurs when a new enterprise is officially formed as a new sustainable venture and a sustainable vision and mission are established.

5.5. Stage 4.1: Sustainable Product Development

In contrast to prior studies [5,8] which suggest that product development typically occurs before the exploitation of sustainable opportunities, our analysis of six case studies reveals that in the context of deep-tech, the stage of sustainable product development takes place after the venture launch.

The case studies indicated that businesses allocate significant effort and resources to this phase, particularly within the initial one to three years of the launch. Organisations often strive to improve and refine their technology through ongoing upgrades, testing, and the introduction of newer versions, rather than settling for the initial stage of creation. The research conducted by Dimov [81], Corbett [82], and Vogel [79] provides more evidence that the product development stage is characterised by a significant amount of iteration and dynamism. This stage entails acquiring knowledge in unexpected situations and through experimentation. The sustainable product development stage focuses on maximising capabilities by refining the specific mechanisms of the innovative model variation [78]. This phase also provides the opportunity to create preliminary prototypes and showcases to customers and stakeholders for beta-testing [42,78], conduct pricing strategy experiments, or refine, shape, and improve the business concept [83]. Within the deep-tech industry context, the process of product development encompasses the development of prototypes that feature adequate functionality, along with conducting market research and collecting feedback. This process ultimately leads to achieving market readiness [84,85]. Also in this phase, the sustainable startup aims to attain social and environmental objectives [41].

The structure of the fifth proposition is as follows:

Proposition 5. 

Sustainable product development in the deep-tech industry necessitates significant time and financial resources, particularly in relation to the development, adoption, and implementation of deep-technologies. This phase also encompasses the testing and trial of beta versions.

5.6. Stage 4.2: New Sustainable Enterprise Financing

Due to the intricate characteristics of deep-tech startups, the funding of sustainable new businesses occurs simultaneously with the product development stage. Ensuring adequate funding is critical for developing and then bringing the technology to market [59]. Funding a sustainable startup is a critical phase in an entrepreneur’s quest to develop technology goods and services that prioritise long-term value creation rather than just revenue. Similar to the product development phase, prioritising the importance of social and environmental considerations will aid in achieving feasible and sustainable growth.

Financing a new firm is a crucial entrepreneurial activity, similar to the product development stage [86,87]. The success of new businesses depends on the development of their financial foundations from the start and the continuous funding throughout their lifespan [88]. Grants, donations, and loans are needed when a company lacks commercial revenue or reserves during a certain stage of the entrepreneurial process [89,90].

The implementation of sustainable entrepreneurship can face challenges due to the significant expenses involved in product development. As a result, many individuals opt for traditional entrepreneurship, which prioritises financial profits over environmental line and social line values [91]. The increase in net capital inflows into sustainable enterprises and funds contributes to the value placed on sustainability [92,93,94,95]. Shaw and Carter’s survey [80] revealed that none of the social entrepreneurs prioritised financial profit as their primary goal. Startups that prioritise sustainability are expected to receive a significantly greater amount of investment. This is because their enhanced valuation is influenced by their positive impact on communities and the environment.

In the research case studies, all businesses prioritised technology innovation to address sustainability challenges over profitability. Hence, securing external finance is vital for sustaining a company’s research and development initiatives as well as ensuring its long-term operational viability. The development of deep-technology and dedication to sustainability give the startup a unique identity, allowing it to achieve a significant position in terms of funding. We structure the sixth proposition as follows:

Proposition 6. 

Financing of sustainable new ventures is a critical stage for entrepreneurs to build technology products/services and achieve sustainable values, rather than focusing solely on profitability.

5.7. Stage 5: Scaleup Sustainable Enterprise

During the final phase of the SEP, startups aim to achieve significant growth. At this stage, the company reaches a level where it begins to generate profitable sales or reaches the point where expenses are equal to revenues. According to Belz and Binder [8], sustainable firms either create new sustainable market sectors or enter existing ones. Sustainable firms are expected to improve social and community networks, cultural and environmental conditions, human rights, economic development, education, citizenship, and health [5]. This sets them apart from traditional entrepreneurs. Scalability refers to a company’s efforts to widely spread a sustainable solution, maximising social and environmental transformation and progress [43]. This alignment enables the analysis results to be achieved across the case studies. The seventh proposition is formulated as follows:

Proposition 7. 

Sustainable enterprise scaling up when the entrepreneur generates social line value and environment line value with the aim of achieving economic line value.

5.8. A Sustainable Entrepreneurial Process Model of Deep-Tech Entrepreneurship

The aim of this article is to investigate the progression of sustainable entrepreneurs as they transition from startup ventures to scaleup enterprises within the context of deep-tech. The process model offers innovative perspectives on the process as a sequential series of events, comprising six fundamental activities: (i) Sustainable idea generation; (ii) Sustainable opportunity recognition and evaluation; (iii) Venture launch; (iv.i) Sustainable products/services development; (iv.ii) New sustainable enterprise financing; and (v) Sustainable enterprise scaleup. Figure 2 illustrates the SEP in the deep-tech industry.

Adding to the finding of prior SEPs, sustainable entrepreneurial opportunities within the context of the deep-tech industry highlight entrepreneurs’ interests and knowledge of deep-tech that can be leveraged to address current sustainability challenges. The process emphasises the entrepreneurs’ technological expertise as a crucial foundation for the initiation of the SEP in the deep-tech industry context. Compared to prior general SEPs [5,7,8], there is no significant separation between the recognition and evaluation of sustainable opportunities, as deep-tech entrepreneurs must establish new markets. Furthermore, the SEP in the context of deep technology differs from previous SEPs due to its sequence of opportunity exploitation. Sustainable solution development occurs prior to venture launch, whereas in the deep-tech industry, it occurs after venture launch and concurrently with new venture financing.

The process begins with the conceptualisation of entrepreneurial ideas and the identification of opportunities, during which entrepreneurs frequently prioritise technological interventions to tackle sustainability issues. The entrepreneurial opportunity recognition and evaluation stage lies in achieving a harmonious equilibrium between technological progress and environmental, social, and economic line values. A sustainable startup is complex, requires significant resources, and involves inherent risk. Deep-tech entrepreneurs, unlike others, usually have no entrepreneurial or economic background; they frequently seek counsel from industry experts or collaborate with partners in order to effectively navigate the complexities associated with market entry and the successful realisation of their ideas.

The stage of venture launch involves the integration of a sustainable vision and mission into a new business. The adoption of sustainable values represents a practical strategy that has the potential to enhance entrepreneurs’ ability to attract customers, investors, and government support. Furthermore, the deep-tech startup must create detailed frameworks and tools to successfully implement a strong business model and adequately prepare for financial support and growth.

The stage of a startup encompasses two simultaneous activities: sustainable product development and new sustainable enterprise financing. The development of sustainable deep-technologies requires complex and intensive research and development processes, wherein the progression of deep-tech products from inception to market readiness spans multiple years. The financing of sustainable new ventures is a critical stage for entrepreneurs to build technology solutions and achieve sustainable values, rather than focus solely on profitability.

The enterprise scales up when the enterprise generates social line and environment line value with the aim of achieving the economic line. However, the process of scaling up and commercialising deep-tech involves significant risks and requires the presence of “patient” capital. This form of capital demands that both entrepreneurs and investors exercise patience as they await the realisation of financial gains.

6. Conclusions

6.1. Theoretical and Practical Contributions

This paper offers a thorough understanding of the SEP in a particular field, addressing the gaps identified by previous researchers [5,7,8]. Based on the research findings, we suggest a process model that includes five phases with six activities. The paper highlights the complex and long cycle of product development. Therefore, in contrast to previous SEPs research [5,7,8], the development of sustainable products or services occurs after venture launch and concurrently with the funding of sustainable businesses, and both support one another [86,88,96]. Comparing to general sustainable startups, deep-tech entrepreneurs must generate market demand [13,44,97], resulting in the absence of a distinction between recognising sustainable opportunities and evaluating sustainable opportunities.

The article also addresses the need for studies on sustainable entrepreneurship and future trends [98] in deep technologies. The paper addresses how deep-tech entrepreneurs scale up and contribute to the social line and environmental line [99]. The study presents a novel and comprehensive theoretical framework that provides knowledge of sustainable entrepreneurship and deep-tech startups. This study offers essential insights and serves as a foundation for future research to tackle unresolved difficulties at different stages of the process.

Our research is built upon the nature of progression of startups that aim to solve sustainable issues by offering innovative deep-tech products. In order to accomplish the SDGs and uphold economic values, entrepreneurs must follow a structured process. This allows them to effectively allocate and manage resources for an extended period of research and development, ultimately delivering sustainable deep-tech solutions [17]. Technology expertise and interests possess the ability to effectively address social and environmental problems, thereby serving as catalysts for the generation of entrepreneurial opportunities. The entrepreneurial process emphasises the importance of the technological aspect, especially in the initial stage. However, it is crucial for entrepreneurs to prioritise sustainable outcomes throughout the SEP.

The research and development of deep-tech products necessitates a significant amount of time and financial investment. By committing to contribute to sustainability, the startups may more easily attract finance [87,96], especially from venture capital. The long cycle of product development and commercialising deep-tech is apprehensive with considerable risks, therefore necessitating the presence of “patient” capital from entrepreneurs and financial investors.

Furthermore, our finding depicts deep-tech entrepreneurs as a force seeking to facilitate socioenvironmental transformation [100]. The environmental and societal value of the deep-tech startup is quantified by tangible metrics (e.g., energy conservation or waste minimisation), which are frequently utilised in sustainable management research [101,102]. The research article verifies that deep-tech entrepreneurs, irrespective of their fields [11,12], establish technological innovation that contributes to social and environmental value [103], thereby contributing to the SDGs [14,15,104].

Finally, it is crucial for policymakers to develop laws and legislation to understand the pattern of deep-tech sustainable startups and to offer assistance to startups and investors in the deep-tech sector. This assistance will empower them to demonstrate resilience in their technical progress and make substantial contributions towards sustainable development.

6.2. Limitations and Directions for Future Research

The article, as anticipated, has essential limitations. The article’s most significant contribution lies in the utilisation of the qualitative research approach to develop the deep-tech SEP model. We limited the choice of case studies to startups in developed countries. Therefore, there is a possibility of studying the SEP in emerging or developing countries. Moreover, the use of internal and external secondary data in qualitative research might lead to incomplete findings and restricted analytical viewpoints. The opportunity for future study resides in the ability to undertake either data-driven or quantitative research to investigate the entrepreneurial process of individual entrepreneurs and compare it with the suggested process model for validation.

The peer-review comments emphasise the necessity of establishing a more robust theoretical framework and suggest the inclusion of supplementary case studies of sustainable startups that are not associated with deep-tech to investigate the distinctiveness of this particular niche. Considering the constraints of this study, future research might compare and contrast deep-tech startups to non-deep-tech case studies. As a result, the SEPs can vary from one sustainable deep-tech startup to another.

Like earlier studies, another limitation of this paper is its emphasis on the characteristics and order of the process; hence, it is descriptive [5,8]. While the research method helped to gather relevant evidence about the development of sustainable entrepreneurship, it did not provide a sufficient explanation for the fundamental reasons behind this process. Future academics will have the opportunity to study each stage of the SEP, as well as the business model canvas, tactics, and internationalisation of deep-tech sustainable businesses.

According to the peer-review comments, deep-tech startups address social and environmental issues; however, there are significant ethical risks [105,106]. While this paper presents only positive outcomes of deep-tech startups to the SDGs, there is an opportunity for future research to analyse both the positive and negative impacts of deep-tech startups during the SEP to obtain a more comprehensive picture of the industry.