"Changing with the Times: An Integrated View of Legitimacy, Logics and New Venture Lifecycles"

Abstract

New ventures need to be perceived as legitimate to acquire resources. To be perceived as legitimate, entrepreneurs must adapt their ventures to meet the norms and standards of different audiences. As an entrepreneurial venture evolves through different organizational lifecycle stages, so audiences from various institutional settings evaluate it by applying different institutional logics. We conceptually investigate how the cognitive and sociopolitical legitimacy of a technology venture is linked with the institutional logic of critical resources providers’ at each lifecycle stage. This framework provides a basis to describe the legitimacy risks and challenges confronting entrepreneurial firms as they transition from one organizational lifecycle stage to the next. Additionally, we identify the organizational attributes that enable a venture to successfully overcome the legitimacy risks and challenges associated with such transitions.