Selling without selling out : Growth dilemma of sustainability-driven firms

Drawing on resource dependence and real options theories, I propose a theoretical model explaining the choice made by many sustainability-driven firms to finance their growth by selling equity to a strategic investor (competitor) rather than to a financial investor (venture capital firm). More specifically, I suggest that resource complementarity, capital requirements, competitive threat and demand uncertainty predict the choice of an investment option. In addition, using insights from the mergers and acquisitions literature, I propose that selling a firm does not lead to ‘selling out' if the acquired firm retains a high degree of autonomy.