As hybrid organizations with financial and social objectives, social enterprises must balance competing logics for governance, stakeholders, and outcomes when considering organizational design and structure. The existing legal landscape for organizations exacerbates this dilemma by forcing social enterprises to incorporate as either a nonprofit or for‐profit organization. This research examines the entity formation process for social enterprises by presenting sector choice as an interaction among four factors: equity financing, organizational lineage, human capital, and funding environment. Using a qualitative comparative case analysis, this research demonstrates that contingent factors drive sector choice when legal incentives and institutional pressures are unclear. For those choosing nonprofit forms, the status of the parent organization—the organizational lineage—is determinative. For those operating in the for‐profit context, human capital is predictive. The resulting conceptual framework contributes to existing organizational theory on hybrid organizations by presenting the sector selection process as independent of the motives or legal incentives typically associated with sector choice. This research concludes with a discussion on the advantages of delaying the formal sector declaration process.

As boundaries between the business and social sectors dissolve, social entrepreneurship has emerged as a phenomenon that bridges two worlds previously divided. Now, social entrepreneurs embrace market-based tools to address society’s greatest challenges. Coinciding with the growth of the sector, students and researchers have sought to understand development, growth strategies, and the practical challenges related to social entrepreneurship. In turn, universities have bolstered social entrepreneurship education by creating academic offerings that emphasize business, social impact, and innovation. Still, social entrepreneurship education remains in its infancy. Courses are as varied as the field itself, and instructors routinely rely on their professional backgrounds and networks to develop curricula that explore the field’s multifaceted character. Thus, social entrepreneurship courses are diverse across disciplines, and the academic literature theorizing the phenomenon is similarly emergent. As social entrepreneurship courses combine theoretical insights with experiential learning in a myriad of ways, aligning theoretical insights with necessary core competencies presents a challenge. To address this dilemma, we highlight the importance of employing theory-driven concepts to develop core competencies in social entrepreneurship students. In doing so, we review key threshold concepts in the social entrepreneurship literature and suggest how instructors might link theoretical insights to practical skill sets.