Venture launch and growth as a status-building process

“Nobody ever got fired for buying IBM.” This old adage sums up the advantage large established firms have in securing customers and sustaining their business. As a prototypical institution, IBM epitomizes the established organization that through longevity, size, and reputation is beyond reproach. New firms, in contrast, are status-challenged. They have no history, little name recognition, an unknown brand, and a lack of established resources to leverage. So how do new firms go about establishing legitimacy and securing status to go from being an unknown to a viable, growing entity? New ventures face intimidating odds in the development phase. New venture research consistently documents high venture failure rates, even approaching eighty percent (Baum, Locke, and Smith, 2001; Cooper, Dunkelberg, and Woo, 1988). Founders often struggle with scarce resources including time, human capital, the physical and strategic resources required to turn ideas into commercialized products, and financial capital to develop and launch the emerging enterprise (Acs and Audretsch, 2003).