After Achieving Legitimacy: When and How New Ventures Stop Acquiring and Start Confirming Legitimacy

Abstract

The legitimacy threshold has been a predominantly-theoretical point at which new ventures have sufficient stakeholder acceptance to access resources and customers. Despite an abundance of research on how new ventures go about acquiring legitimacy, we still do not have a reliable way of knowing when they have in fact acquired it and what they do immediately afterward. Building on theories of legitimacy, linguistics, and entrepreneurial communication, the present research explores these gaps through a linguistic analysis of new venture communications. Using computer aided text analysis and change point determination to quantify social media activity of 105 crowdfunding ventures, I find that the point at which ventures complete and transition out of the legitimacy acquisition stage can be determined by reductions in linguistic markers of identity building, association making, and credibility establishment. Further, I find that this transition point is beyond successful resource acquisition and that after its crossing, ventures begin legitimacy confirmation. These findings provide insight into a previously understudied period in the legitimation process and makes a number of contributions to both legitimacy and venture communication research.