Introduction

In the contemporary startup landscape characterized by rapid digitalization and an increasing emphasis on connectivity, the significance of social capital in facilitating startup success is undeniable (Usman et al., 2024). Social capital refers to the resources and benefits derived from social networks, including trust, reciprocity, and information sharing (Bourdieu, 1983; Putnam, 2000). Traditionally, the relevance of social capital lies in face-to-face interactions, where individuals or groups leverage relationships to access resources, share information, and achieve mutual goals (Claridge, 2018). With the emergence of social media platforms such as LinkedIn, Facebook, X (formerly Twitter), Instagram, and YouTube, startup companies now have opportunities to build “digital” social capital. The relationships, trust, and resources generated through digital social networks can serve as assets for startup funding success, particularly in securing venture capital funding. This literature review contextualizes a digital social capital framework by drawing on research from multiple fields, including entrepreneurship, digital media studies, and social capital theory. The scope includes research studies published over the last two decades, focusing on the interplay between social media engagement and startup success. By synthesizing findings across these domains, the review aims to understand how startups can utilize digital platforms to establish networks, cultivate trust, and secure funding.

The following sections first explore the foundational concepts of the contemporary startup landscape and the challenges of startup funding, followed by a discussion of recent studies examining the role of digital social media platforms in fostering social capital. The culmination of this conceptual paper is a proposed framework, known as the digital social capital theory. The framework draws upon Nahapiet and Ghoshal’s (1998) work, which identifies three dimensions of social capital: structural, relational, and cognitive. The three dimensions are then adapted to the context of digital social media to explore how social networks can facilitate the creation and use of social capital in the digital environment. This new digital social capital framework is accompanied by a call for research to empirically test and refine how social media networking can help startups optimize their digital strategies to access funding. By establishing a strong theoretical foundation and identifying gaps in the existing literature, this paper aims to advance the understanding of digital social capital as a crucial driver of startup funding success.

Literature Review

The literature review employed a hermeneutic approach, emphasizing an iterative process that summarizes the existing research on startup companies and funding, and adds a deeper understanding of the dynamics between social capital, digital social media platforms, and startup company funding. The review was conducted systematically, ensuring a comprehensive and coherent analysis of the reviewed literature, from identifying sources and keywords to selecting criteria and final analysis. The initial review drew on sources from three databases: Web of Science, Scopus, and ScienceDirect. These databases were chosen to cover entrepreneurship research, social capital theory, and information systems. The sources span from theoretical works on social capital (Bourdieu, 1983; Putnam, 2000) to contemporary studies examining digital platforms’ role in startup company success (Banerji & Reimer, 2019). Additional sources, such as industry reports like the Venture Monitor Report, also offered insights into current venture capital and startup funding trends. A set of keywords was used to gather the literature based on the research objectives outlined in the study. These keywords crossed the intersection of social capital, entrepreneurship, digital platforms, and startup funding: venture capitalist, entrepreneur, startup funding, social capital, social media platforms (LinkedIn, Facebook, Instagram, X, and YouTube), and online reputation. The keywords were applied across the databases to ensure a collection of citations related to the research question was addressed.

After collecting the relevant literature, inclusion and exclusion criteria were applied to refine the review’s focus. Inclusion criteria prioritized studies related to social capital theory, digital platforms, empirical research with clear data, and publications from 2013 to 2024. Only studies discussing the role of social capital in startup funding were included, particularly those examining how platforms such as LinkedIn, Facebook, X, Instagram, and YouTube facilitate social capital and influence funding outcomes. Research that contributed to the theoretical foundations of social capital and its relevance to startup success was prioritized. Excluded were studies lacking a digital context, those that were outdated, or those that failed to address the evolving nature of digital social capital or its application to startup funding. This literature review contextualizes the development of a digital social capital framework by synthesizing research across social capital theory, startup funding mechanisms, and digital media studies. It incorporates both quantitative and qualitative findings to examine how digital platforms shape entrepreneurial ecosystems. The following sections outline the theoretical foundations of social capital, then detail how these are adapted into a digital social capital framework, an interpretive structure for analyzing digital relationships and funding success. The review concludes by presenting emerging evidence on the interplay between digital social capital and startup funding, building toward a revised conceptual model that adapts Nahapiet and Ghoshal’s (1998) three-dimensional framework to the digital era. In total, there were twelve publications considered in this review.

Theoretical Foundation: Social Capital Theory

Social capital refers to the resources and benefits derived from social networks, including trust, reciprocity, and information sharing (Bourdieu, 1983; Putnam, 2000). Nahapiet and Ghoshal’s (1998) three-dimensional model of social capital provides a framework for understanding how networks function. Their model breaks down social capital into three key dimensions: structural, relational, and cognitive.

  • The structural dimension of social capital considers the connections between individuals or organizations. In the startup context, structural social capital focuses on the role of the networks in facilitating access to information and sources, which are crucial for startup ventures looking to innovate and scale (Burt, 2000).

  • The relational dimension describes the trust, norm, and obligations that arise from the quality of social interactions. For startups, it involves building a high level of trust within the startup company’s networks that may significantly enhance their credibility and, consequently, their ability to secure funding (Nahapiet & Ghoshal, 1998).

  • The cognitive dimension involves shared values that enable collective action. Startups often rely on a shared vision and culture to motivate and align the efforts of stakeholders (Nahapiet & Ghoshal, 1998).

Traditionally, social capital was built through face-to-face interactions, through which relationships provided access to resources and information to achieve shared goals through networking (Claridge, 2018). Social capital’s three dimensions—structural, relational, and cognitive—are pivotal for startups in shaping the quality of networks, trustworthiness, and shared understandings, which are crucial for securing resources and fostering growth. However, with the emergence of digital social media platforms, the methods for building and leveraging social capital have evolved. Digital platforms now provide startups with unprecedented opportunities to create and expand social capital, enabling them to connect with investors and stakeholders across geographic boundaries without the need for in-person interactions. This shift underscores the broader significance of adapting social capital theory to the digital context, highlighting how the digital environment reshapes the dynamics of social connections, trust, and shared understanding. By extending the theoretical foundation of social capital into the digital domain, this framework lays the groundwork for exploring how startups can effectively leverage digital social capital to enhance their strategies and achieve funding success.

Social Capital and Digital Platforms in Startup Funding

This conceptual paper adopts Nahapiet and Ghoshal’s (1998) three-dimensional model of social capital (structural, relational, and cognitive) to the digital domain by redefining each dimension in the context of online networks and interactions. The adaption is informed by existing research on social capital, networks, and the role of online engagement in startup companies. The inclusion criteria specified the use of common digital platforms that facilitate professional networking, brand visibility, and community engagement, such as LinkedIn, Facebook, X, Instagram, and YouTube. Exclusion criteria included more niche or newer platforms, such as Truth Social, because of the lack of usage. The model assumes that social capital on digital platforms is not only shaped by the number of connections but also by the quality of interactions and consistency of brand messaging. The model is comprised of the following dimensions:

  • The Structural Dimension: In the digital space, the structural dimension of social capital is represented by a startup’s online network. This includes the breadth and quality of connections across platforms such as LinkedIn, Twitter, and Instagram. The structural dimension highlights the ways in which startups build their digital networks, not only by increasing the number of connections but also by strategically targeting relationships that enhance visibility and access to resources. For example, a startup with a large and diverse network of followers gains exposure to potential investors and collaborators, opening opportunities to access resources and expand its reach within the market.

  • The Relational Dimension: The relational dimension in a digital context is reflected in the depth of interactions and engagement within these networks. Metrics such as likes, shares, comments, and direct messages signify trust and support within the online community. These interactions indicate relational quality, demonstrating that a startup has established meaningful connections with its audience. For instance, startups that maintain active engagement with their followers build credibility and foster a sense of loyalty and trust, which are crucial for convincing investors of their legitimacy and potential for growth.

  • The Cognitive Dimension: The cognitive dimension is embodied in the alignment of a startup’s branding, values, and mission as conveyed through its digital presence. Consistency in messaging across social media platforms, websites, and other digital content reflects a shared understanding between the startup and its audience. For example, a startup that consistently communicates its commitment to sustainability through its online profiles and marketing materials demonstrates shared values with environmentally conscious investors and consumers. This alignment reinforces trust and enhances the startup’s reputation within the digital ecosystem.

By redefining these dimensions in the digital context, this framework demonstrates how digital platforms allow startups to leverage social capital in new and impactful ways. The structural, relational, and cognitive dimensions collectively enable startups to increase visibility, foster trust, and attract potential investors, illustrating the growing significance of digital social capital in today’s entrepreneurial ecosystem.

Challenges and Opportunities in Measuring Digital Social Capital

While digital social capital offers startups unprecedented opportunities to secure funding, the shift toward digital brand presence also presents challenges such as over-reliance on digital networks, noting the potential for exclusionary practices or diminishing returns (Boczkowski et al., 2018). Additionally, metrics such as followers and likes do not always translate directly into financial outcomes, necessitating the need for robust methodologies to evaluate the impact of digital engagement. Future studies must address these limitations better to understand digital social capital through quantitative and qualitative approaches. Applying these methodologies will improve understanding and addressing these challenges related to the digital social capital theory and ensuring its practical application in fostering startup growth.

Emerging Evidence on Crowdfunding and Venture Capitalism

The literature consistently demonstrates that startups with strong digital presence tend to attract more startup funding. Studies by Bellefamme et al. (Belleflamme et al., 2013) and Mollick (2014) highlight the role of online social networks in crowdfunding success, where small contributions from numerous backers are secured through platforms like Kickstarter. However, venture-backed startups operate differently, requiring larger investments and more sophisticated networks. Banerji and Reimer (2019) found that LinkedIn followers strongly predict funding success for venture-capitalist-backed startups, suggesting a need to expand this research to other platforms such as Facebook and Instagram. Expanding the conceptual research to include multiple platforms and their unique properties will provide a more comprehensive understanding of how digital networks influence funding across startups.

Economic and Market Contexts

Economic factors like inflation, interest rates, and market volatility further influence venture capital investment. The Q4 2023 Venture Monitor Report notes that these dynamics have led to more conservative investor behavior, particularly in early-stage ventures. Startups must adapt by demonstrating resilience and leveraging digital platforms to attract investors during economic uncertainty. By understanding the economic factors and the evolving digital landscape, including the rise of online digital platforms and data-driven decisions, startups can position themselves strategically to secure funding and sustain growth despite challenging financial periods.

Multi-Platform Engagement: Toward a Conceptual Framework

Building on the reviewed literature, this concept paper proposes a Digital Social Capital Framework to guide startups in optimizing their digital strategies. The framework positions multi-platform engagement as a critical driver of funding success. By combining measurable attributes such as network size, engagement metrics, and cross-platform presence, the framework provides a roadmap for startups to build and leverage digital social capital effectively. The concept focuses on the strategic value of digital presence, particularly on digital platforms like LinkedIn and Facebook, where visibility and credibility can influence venture capitalist interest. In the digital platform era, the funding environment includes competitors, investor due-diligence and factors that may influence funding decisions. Within this very context, the digital social capital framework guides startup companies to prioritize specific attributes to attract investors.

In conclusion, this review highlights the need for further empirical research to validate the proposed framework and refine our understanding of how digital social capital can enhance startup funding success. By situating the discussion within the broader context of social capital theory and digital innovation, the paper aims to advance theoretical and practical insights into the evolving role of digital platforms in entrepreneurship. Ultimately, the conceptual paper underscores the transformative potential of digital social capital in shaping the future of startup success while calling for the much-needed application and theoretical implications.

Discussion

The proposed Digital Social Capital Framework underscores the critical role of digital social capital in the contemporary startup ecosystem, particularly in securing funding. In an increasingly digitalized world, startups must strategically utilize social media platforms to build relationships, establish credibility, and enhance visibility. This discussion contextualizes social capital’s structural, relational, and cognitive dimensions within the digital domain, offering practical insights for startups to optimize their online presence and engagement.

Structural Dimension of Digital Social Capital

The structural dimension of social capital emphasizes the importance of the network’s size and configuration. This is reflected in the number of followers, connections, and cross-platform presence on digital platforms. Startups with extensive networks are perceived as having greater access to resources, partnerships, and opportunities, enhancing their value in the eyes of potential investors. For example, a LinkedIn profile with many followers signals legitimacy and reach. At the same time, a multi-platform presence (e.g., LinkedIn, Instagram, and YouTube) demonstrates adaptability and engagement in diverse digital environments. This dimension highlights the need for startups to expand their digital networks strategically and consistently to access new opportunities and audiences. By leveraging the structural dimension effectively, startups can establish a robust digital presence that amplifies their visibility and positions them as credible and resourceful players in the funding landscape. The digital environment presents greater stakes because posts and interactions function as evolving performances that establish legitimacy and connectivity between users. Traditional network representations stay fixed and inactive, but digital expressions undergo ongoing interpretation by diverse audiences. The way content is received via engagement metrics such as likes and shares creates social validation or critique, which becomes part of the startup’s visible assets. The ongoing public nature of digital presence requires startups to develop strategic and adaptive approaches to manage their visibility intentionally in ways such as creating consistent messaging, engaging meaningfully with customers, and aligning online content with brand identity. Digital reception including metrics, like the number of shares, likes, and comments, plays a role in influencing credibility by shaping how customers perceive legitimacy and trustworthiness. Positive engagement enhances a startup company’s reliability, while negative feedback or low engagement may raise doubts among stakeholders to impact funding success.

Relational Dimension of Digital Social Capital

The relational dimension focuses on the quality of relationships within a startup’s digital network. Metrics such as likes, comments, and shares indicate audience engagement, trust, and credibility. High engagement levels reflect a startup’s ability to build meaningful connections with its audience and demonstrate its stability and relevance. For instance, a startup that consistently engages with its audience through interactive posts, live sessions, and timely responses to comments fosters a sense of community and trust. Such interactions enhance the startup’s reputation and establish a foundation for stronger investor relationships. By prioritizing relationship-building through sustained digital engagement, startups can create a reliable network of supporters and advocates. Ultimately, the relational dimension underscores the power of trust and engagement in fostering connections that drive audience loyalty and potential investor confidence. In this context, stability can be demonstrated through continuous communication and reliable leadership or market presence. Trend alignment, product innovation and addressing customer needs indicate relevance. When stakeholders view a startup company as stable through consistent digital presence and communication with relevance that aligns with current trends while engaging with customers, they are more likely to regard the startup company as trustworthy and credible with long-term investment potential.

Cognitive Dimension of Digital Social Capital

The cognitive dimension underscores the significance of consistent messaging and alignment with stakeholders’ values. Startups that craft cohesive narratives across digital platforms are better positioned to resonate with investors and audiences. This dimension involves leveraging digital content to communicate a unified vision, mission, and value proposition. A well-crafted digital message differentiates a startup from its competitors and captures the attention of investors who align with its purpose. For example, a tech startup with a strong sustainability focus might use social media campaigns to highlight its eco-friendly initiatives, appealing to investors prioritizing environmental, social, and governance (ESG) principles (Scuotto et al., 2023). The cognitive dimension emphasizes that alignment between the startup’s digital identity and its stakeholders’ expectations is critical for attracting investment and support. By prioritizing alignment and consistency in messaging, the cognitive dimension allows startups to build meaningful connections with stakeholders and secure investments that align with their vision and values. From ethical commitments to product offerings, the range of values a startup company represents must be clearly communicated so that the stakeholders can access whether they align with the stakeholders’ principles or investment objectives.

Strategic Implications

The Digital Social Capital Framework offers a roadmap for startups to navigate the complexities of the digital funding landscape. Startups should adopt a multi-platform strategy, ensuring their presence is robust. This points to active engagement, consistent content, strong audience reach, and cohesion defined by uniform branding, messaging, and tone across platforms such as LinkedIn, Instagram, and X (formerly Twitter). By integrating the three dimensions – structural, relational, and cognitive – startups can develop a comprehensive digital strategy that optimizes their social capital. Specifically:

  • Structural strategies include expanding follower bases and leveraging cross-platform synergies.

  • Relational strategies involve maintaining high levels of engagement and fostering interactive communication.

  • Cognitive strategies focus on crafting consistent, values-driven messaging that resonates with stakeholders.

This integrated approach enables startups to build and sustain trust, enhance visibility, and secure funding in a highly competitive digital ecosystem. By leveraging the digital social capital framework, startups can position themselves as credible, trustworthy, and innovative players while also ensuring their digital platform strategy remains aligned with their capacity, intended audience needs, and long-term strategic goals.

Limitations and Future Research

The proposed Digital Social Capital Framework provides valuable insights into how digital social capital influences startup funding success. However, it is essential to acknowledge the framework’s limitations and identify areas for future research to refine and extend its applicability.

Limitations

  1. Empirical Validation:
    The framework is conceptual, synthesized from existing literature and theoretical models, and has not yet been empirically tested. Future research should focus on validating the proposed relationships through quantitative methods, such as examining the correlation between specific digital metrics and funding outcomes.

  2. Platform-Specific Differences:
    While the digital social capital framework assumes that social capital can be developed across multiple platforms, it does not account for the unique characteristics and dynamics of each platform. For example, the way social capital is built on LinkedIn may differ significantly from platforms like Instagram or YouTube. Future studies should explore how social capital is cultivated and utilized on individual platforms and how these differences impact funding success.

  3. External Factors:
    The framework does not include the influence of external factors such as economic conditions, industry trends, or investor preferences. External factors may shape funding outcomes in a case-by-case scenario where digital presence may not account for macroeconomic downturns or sector-specific volatility. A more comprehensive analysis is needed to understand how these external variables interact with digital social capital, potentially mediating or moderating their impact on startup company visibility, trust, and investment success.

Addressing the limitations through future research will add to the robustness of the digital social capital framework and provide a more detailed understanding of how startups can effectively leverage digital platforms to achieve funding success.

Future Research Directions

  1. Quantitative and Longitudinal Studies:
    Future research should gather empirical data from digital platforms such as Crunchbase, LinkedIn, Facebook, X, Instagram, and YouTube to identify the most significant predictors of funding success. Longitudinal studies tracking startups over time could provide valuable insights into how digital social capital evolves and how different digital strategies influence funding outcomes at various growth stages.

  2. Platform-Specific Studies:
    Research should investigate how startups adapt their digital strategies to leverage platform-specific features effectively. For example, studies could analyze how LinkedIn’s professional networking focus compares to Instagram’s visual storytelling approach in building social capital and attracting investors.

  3. Industry-Specific Approaches:
    Different industries may require tailored strategies for building and utilizing digital social capital. Future research could explore how industry-specific factors shape the role of digital social capital in securing funding, offering targeted insights for startups in sectors like technology, healthcare, and sustainability.

Future studies can build a stronger empirical foundation for the Digital Social Capital Framework by addressing these limitations and pursuing these research directions. This would enhance its relevance and applicability, offering actionable strategies for startups navigating the complexities of digital engagement and funding in a rapidly evolving entrepreneurial landscape. By exploring these research directions, scholars can refine the Digital Social Capital Framework into a dynamic, evidence-based tool that empowers startups to harness digital platforms for sustainable growth and funding success in diverse and evolving contexts.

Conclusion

This conceptual paper introduces a framework that redefines the role of digital social capital in securing startup funding, integrating social capital theory with contemporary insights into the startup ecosystem. By adapting Nahapiet and Ghoshal’s (1998) structural, relational, and cognitive dimensions to the digital context, the framework offers a comprehensive approach to understanding how startups can strategically leverage digital platforms like LinkedIn, Facebook, Instagram, X (formerly Twitter), and YouTube to enhance their funding prospects. The digital social capital framework provides a strategic approach for startups to navigate the digital environment, equipping them with actionable insights to build robust social capital and explore new funding opportunities.

The digital social capital framework consists of structural, relational, and cognitive dimensions that shape how startup companies build and leverage their online presence. The structural dimension emphasizes the value of extensive and diverse digital networks as indicators of resource accessibility. The relational dimension highlights the importance of cultivating trust and credibility through sustained engagement with audiences, while the cognitive dimension underscores the role of cohesive messaging and alignment with stakeholders’ values. Together, these dimensions provide a roadmap for startups to optimize their digital strategies and navigate the competitive landscape of venture capital funding. Integrating the structural, relational, and cognitive dimensions equips startups with a strategic framework to navigate and succeed in the complex venture capital landscape.

As the startup ecosystem continues to evolve in a rapidly digitalized world, the ability to build and effectively utilize digital social capital will remain a critical determinant of success. By developing robust online networks, fostering meaningful relationships, and crafting aligned and compelling narratives, startups can secure funding and position themselves for long-term growth and resilience in the dynamic entrepreneurial landscape. Ultimately, mastering digital social capital will enable startups to thrive in the competitive entrepreneurial ecosystem, ensuring adaptability and sustained success in the face of digital transformation.