Mukherjee, AbhishekOwen, RobynScott, Jonathan M.Lyon, Fergus2024-10-252024-10-252024Mukherjee, A., Owen, R., Scott, J. M., & Lyon, F. (2024). Financing green innovation startups: a systematic literature review on early-stage SME funding. Venture Capital : an International Journal of Entrepreneurial Finance. https://doi.org/10.1080/13691066.2024.24107301369-1066https://hdl.handle.net/10289/16999This paper investigates the critical issue of financing early-stage green startups, examining the types of investors and finance models available, the challenges these startups face, and how the green finance ecosystem can better support early-stage investment. Utilizing a systematic literature review (SLR) methodology, we provide a comprehensive analysis of the current landscape. Our findings reveal a significant paucity of data and a bias towards well-established North American and European ecosystems, while highlighting an emerging diversity in private finance sources post-Global financial crisis (GFC), including grants, equity, and crowdfunding. Despite this, there remains a heavy reliance on public funding and a lack of evidence regarding its impact. The inherent characteristics of cleantech–high capital expenditure, long investment horizons, and disruptive nature–necessitate innovative public financing instruments and policies to reduce risk and attract private investment. Our theoretical contribution highlights the necessity for interdisciplinary research and policy collaboration to develop a holistic entrepreneurial finance (entfin) ecosystem. This approach should integrate quantitative economic and qualitative behavioural finance research to address information asymmetries and improve the green economy policy mix. Such a framework will support public-private co-financing, enhance stakeholder engagement, and provide evidence for policy decisions, facilitating more rapid commercialization of cleantech innovations for environmental sustainability.© 2024 The Authors. Published by Informa UK Limited, trading as Taylor & Francis Group. This is an Open Access article distributed under the terms of the Creative Commons Attribution - NonCommercial-NoDerivatives License (http://creativecommons.org/licenses/by-nc-nd/4.0/).http://creativecommons.org/licenses/by/4.0/green innovationSMEearly-stage innovationcleantechpolicyresearch agendaJournal Article10.1080/13691066.2024.24107301464-53433502 Banking, Finance and Investment35 Commerce, Management, Tourism and Services3507 Strategy, Management and Organisational Behaviour3502 Banking, finance and investment3507 Strategy, management and organisational behaviour13 Climate Action