Circular startups are increasingly recognized as key drivers in the transition toward a circular economy. Yet the business models (BMs) through which these startups operationalize circularity remain poorly understood, limiting the ability of entrepreneurial ecosystem actors to offer effective support. This study addresses this gap by developing a taxonomy that captures how startups embed circularity into their BMs, across value proposition, value creation, and value network. Drawing on a dataset of 125 startups and grounded in BM theory, it combines conceptual synthesis, empirical coding, and expert evaluation. The resulting taxonomy comprises 10 dimensions and 48 characteristics. Our findings show how circular startups integrate environmental and social value creation, adopt ownership and sales models aligned with circular goals, and rely on cross-sector collaboration to compensate for limited infrastructures. The taxonomy offers entrepreneurial ecosystem actors a practical tool to assess startup needs, identify circularity gaps, and design targeted support strategies.
Finner et al. (Thu,) studied this question.