Venture Aging: A Process Model of Legitimacy, Routinization, and Competitor Imitation of Venture Innovation Capabilities

Abstract

This study proposes a process model that delineates how venture aging results in legitimacy and routinization, and subsequent venture performance. This model addresses the gap between new venture literature and organizational management literature. The resource-based view of the firm and competitive rivalry models are used to develop the theory behind the process model. The model shows that venture aging enhances legitimacy, which is shown to increase competitor attacks and imitation attempts of venture innovation capabilities. Venture routinization increases the inimitability of a venture’s innovation capabilities, which decreases the success of competitors trying to imitate the new venture. The resulting effects on venture performance identify approaches that entrepreneurs can take to increase their chances of successfully navigating the venture aging process. The model assists researchers in further developing the competitive rivalry literature by explaining how factors such as awareness, motivation, and capability of competitors influence venture success.