The mediating role of perceived investor confidence in the relationship between sustainable finance and green startup scaling

Background Green entrepreneurial startups contribute to sustainable development but frequently encounter financial constraints that limit their growth. Although sustainable finance is increasingly recognized as an important source of funding for environmentally oriented ventures, the relationship between sustainable finance, perceived investor confidence, and startup scaling remains insufficiently examined, particularly in emerging economies such as Ghana. This study investigates the direct relationship between sustainable finance and green entrepreneurial startup scaling and the mediating role of perceived investor confidence in Ghana’s entrepreneurial ecosystem. Methods Drawing on the Resource-Based View (RBV), signalling theory, and behavioral finance, this study employed a quantitative, cross-sectional survey design. Data were collected from 428 green entrepreneurial startups operating in Ghana and analyzed using partial least squares structural equation modelling (PLS-SEM) to assess the hypothesized direct and indirect relationships. Results The findings reveal positive associations between sustainable finance and green entrepreneurial startup scaling, sustainable finance and perceived investor confidence, and perceived investor confidence and startup scaling. Furthermore, perceived investor confidence partially mediates the relationship between sustainable finance and startup scaling. These findings are consistent with the complementary relevance of sustainability-oriented financial resources and entrepreneurs’ perceptions of investor confidence in understanding green entrepreneurial growth. However, the observed relationships should be interpreted as statistical associations rather than evidence of causal processes. Conclusions This study contributes to the sustainable finance and green entrepreneurship literature through theoretical confirmation, contextual refinement, and integration of established perspectives. Specifically, the RBV highlights the strategic relevance of sustainable financial resources, signalling theory provides an informational perspective on sustainability-oriented financing, and behavioral finance emphasizes the relevance of perceived investor confidence. The findings provide context-specific empirical evidence from Ghana and suggest that sustainable financing initiatives may benefit from complementary efforts to strengthen organizational credibility, transparent sustainability practices, and investor engagement. These insights may inform entrepreneurs, financial institutions, impact investors, and policymakers seeking to support green entrepreneurial development. Given the cross-sectional design, future longitudinal and comparative research is recommended to investigate temporal relationships and assess the applicability of these findings across different institutional and financial environments.