Social entrepreneurs are expected to bring about new economic, social, institutional, and cultural environments (Rindova et al., 2009); the very essence of their endeavors being social change (Alvord et al., 2004, Christensen et al., 2006, Mair and Marti, 2006; Steyaert and Hjorth, 2006). The literature largely suggests that innovation capacity is an intrinsic quality of a social enterprise. However, recent work by Renko (2013) shows that innovative nascent social entrepreneurs are unsuccessful in developing their innovative ideas into successful companies, and that non- innovative social entrepreneurs have far higher odds of succeeding. In order to shed light on this issue, the current paper investigates how the social character of enterprises affects their innovation activities and their innovation performance.