The Influence of Individual Legitimacy-Building Factors and Gender on Funding in Accelerators

Abstract

As a perception of external audience members, organizational legitimacy is a relatively unobservable construct but can be indirectly inferred through the actions taken by external stakeholders. Despite the growing body of research around new venture legitimacy, there has been limited investigation into individual-level founder legitimacy. This research study sought to understand whether individual-level, legitimacy-building factors affect female-led ventures differently than male-led ventures by looking at how gender moderates the relationship between individual legitimacy indicators (e.g., age, entrepreneurial experience, and education) and organizational legitimacy, signaled through outside equity investment. Secondary data collected from accelerator programs was utilized to conduct this analysis. Since equity financing is a key benefit of accelerator programs, these programs provided a useful context to test how gender interacts with founder legitimacy to influence outside equity investment. The results revealed that gender significantly interacts with both age and education to influence outside equity investment. Female founders benefitted by being younger and having more education, whereas male founders benefitted by being older and having less education, suggesting that females and males are judged differently against legitimacy criteria.