“You should mention sustainability – it’ll charm the jury”: Entrepreneurial Narratives and Legitimacy in Norwegian Public Funding

Abstract

In Norway, limited access to private capital means that early-stage startups often rely on institutional stakeholders, such as Innovation Norway, for critical funding and validation. These actors play a central role in determining which ventures move forward, yet little is known about how they evaluate early-stage legitimacy, what kinds of narratives entrepreneurs use to secure their support, and how these dynamics shape the entrepreneurial opportunities that are ultimately actualized in the Norwegian ecosystem.

To answer these questions, this study draws on institutional logics theory and adopts a qualitative multiple-case design, combining interviews with six early-stage founders, two experienced entrepreneurs, and three institutional stakeholders, alongside observations from the national finals of the student entrepreneur competition Venture Cup. Data were analyzed using the Gioia Method to build a grounded understanding of how legitimacy is narrated and judged across institutional settings.

The findings from this thesis reveal a significant misalignment between what Norwegian early-stage entrepreneurs believe institutional stakeholders value and what these stakeholders actually prioritize. While sustainability is frequently performed as a required legitimacy cue, it is typically treated by stakeholders as a soft filter rather than a decisive criterion. Entrepreneurs respond by adapting their narratives to different audiences, using strategic emphasis framing and gradually internalizing market logic through ecosystem feedback.

The study concludes that institutional stakeholders shape entrepreneurial outcomes not only through evaluation criteria, but by embedding expectations into the cultural fabric of the ecosystem. These expectations influence which ideas are pursued, how ventures are framed, and what is perceived as legitimate under uncertainty—raising important questions about the long-term direction and diversity of innovation in Norway.

Keywords:

entrepreneurial narratives, institutional logics, opportunity actualization, legitimacy, Norwegian startup ecosystem