Storytelling to be real: narrative, legitimacy building and venturing

Abstract

Examines the use of narratives in building thelegitimacy of an Internet software startup company. Legitimacy building is theprocess of getting outsiders to believe and invest in the company, for whichthey expect return when belief becomes product and profit. Legitimacybuilding is treated as a verbal process of intertextuality. Toachieve legitimacy, the accounts of company's founding, goals, product, andactivities must mesh with belief systems and business models of the largerbusiness and investment community: an entrepreneur's story must mesh with theexisting, relevant, and accepted story lines of others. For this case study, the author was participant observer in the firm. Thestory was analyzed following the pentad approach by examining the narrativedimensions of act, agent, agency, scene, and purpose. This case study showshow, over 12-month period from 1999 to 2000, the firm members refashioned thecompany story four times as the business and circumstances changed. The narrative is followed from team recruitment, legal incorporation, andsecuring of angel funding, to building of two prototypes, and first sales callsfor first test product. The firm story was authored by different people,purposes, and audiences for different contexts. The case study shows how thefounders decided what they wanted to build and how they would legitimize it forothers. Legitimacy building was highly deliberative and retroactive. Byreformulating legitimacy building as an observable social and linguisticprocess, it can more easily be studied empirically. (TNM)