This study investigates the applicability of the Voluntary Sustainability Reporting Standard for SMEs (VSME) as a reporting mechanism for startups. Using a qualitative approach, semi-structured interviews were conducted with startup founders, ESG consultants, investors, and incubator representatives to identify key drivers and barriers to sustainability reporting in the startup context. Findings reveal that external stakeholder demands—particularly from investors and business partners—drive reporting adoption, alongside internal motivations such as strategic planning, ethical commitments, and organizational learning. While the VSME framework offers flexibility through its modular and "if applicable" design, it currently lacks tailored guidance and practical validation for startups. The study concludes that VSME holds potential as a viable reporting tool for startups if further developed to address their unique constraints and dynamic environments.