How much prestige is enough? Assessing the value of multiple types of high-status affiliates for young firms

Pollock, Timothy G.; Chen, Guoli; Jackson, Eric M.; Hambrick, Donald C.

doi:10.1016/j.jbusvent.2009.01.003

Cited by 243 publications

(269 citation statements)

References 80 publications

(152 reference statements)

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“…The importance of corporate reputation in attracting investment capital has been firmly established (Stuart et al, 1999;Certo, 2003). In addition, the reputation of key individuals or core members affiliated with an organization has been found to play a similar role (Tyebjee and Bruno, 1981;Gorman and Sahlman, 1989;Muzyka et al, 1996;Cohen and Dean, 2005;Franke et al, 2006Franke et al, , 2008Beckman, Burton and O'Reilly, 2007;Pollock et al, 2010).…”

Section: Resultsmentioning

confidence: 99%

“…Our study builds on Reuber and Fisher (2005) who argued that reputation often is domain-specific and Pollock et al (2010) who found a distinction between the signaling effects towards investors of different types of prestigious affiliates of new ventures. We especially extend Franke et al (2006) who focus on the similarity between investors and the core members of new ventures.…”

Section: Resultsmentioning

confidence: 99%

“…Since investors are often approached by the founding members of the nascent organization for financing, this implies that the individual reputation of founding members can serve as a quality signal.. Earlier studies show that the reputations of core organizational members, such as CEOs (D'Aveni, 1990), top management teams (Cohen and Dean, 2005;Higgins and Gulati, 2006), other board members (Certo, 2003;Musteen, Datta and Kemmerer, 2010) or prestigious affiliates (Pollock, Chen, Jackson and Hambrick, 2010) have an impact on a firm's ability to attract investment capital, particularly with respect to start-up teams of new ventures (Tyebjee and Bruno, 1981;Gorman and Sahlman, 1989;Muzyka et al, 1996;Franke et al, 2006Franke et al, , 2008.…”

Section: Reputation and Selectionmentioning

confidence: 99%

“…Pollock et al (2010) look at the differential effects of various sources of reputations when they distinguish between different types of prestigious affiliates of a new venture as well as the additive value of each affiliation in attaining investment capital. Selection system theory allows us to combine, extend and further operationalize the arguments of Reuber and Fisher's (2005), Fisher and Reuber (2007) and Pollock et al (2010), because it suggests that the relative importance of each type of reputational signal depends on the competitive environment and its concomitant selection system -market, peer or expert -in which the selected firms or individuals operate.…”

Section: Reputation and Selectionmentioning

confidence: 99%

“…Our study focuses on the effect of performance-based reputations of a new venture's founding members on different types of potential investment capital providers. We build specifically on studies that investigate the impact of top management team characteristics on investor behavior (Tyebjee and Bruno, 1981;Gorman and Sahlman, 1989;Muzyka et al, 1996;Cohen and Dean, 2005;Henkel, 2006, 2008;Beckman, Burton and O'Reilly, 2007;Pollock, Chen, Jackson and Hambrick, 2010).…”

Section: Introductionmentioning

confidence: 99%

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Nascent ventures competing for start-up capital: Matching reputations and investors

Ebbers

Wijnberg

2012

Journal of Business Venturing

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While earlier studies focused on the general effects of corporate or individual reputations on attracting investment capital, a major contribution of this study is to distinguish between different types of reputations and different types of investors, and then analyze how particular types of reputations have an effect on particular types of investors. We do this by applying selection system theory, which is an approach to understanding competitive processes by focusing on the identity of the decision makers whose evaluations determine the outcome of these competitive processes. The three basic types of selectors are: market selectors, peer selectors and expert selectors.This tripartite classification allows us to categorize types of reputations on the basis of their sources. First, if a reputation is based on success in consumer markets, for example (end-) consumers' quality perceptions of a specific brand of shampoo, it can be linked to market selection. Second, a reputation type can be linked to expert selection if it originates from expert judgments. An example is a credit rating agency 4 such as Moody's. Third, if the reputation is based upon success among peers, for example winning an award at the 'Oscars' where the jury largely consists of other filmmakers, it can be linked to peer selection.At the same time types of investors can be categorized by considering both the characteristics and the goals of the investors making the investment decisions. First, if investors back a venture because they primarily hope that many consumers will like and buy the product they can be identified as market selectors. Second, if investors are (industry) peers of the founding members of the new venture they can be identified as peer selectors. Third, if they are neither market nor peer selectors they can be categorized as expert selectors. This tripartite categorization opens the way to the main argument of this paper: nascent organizations will be more successful in attracting investment capital from an investor if their founding members have performance-based reputations of a type that matches the type of the investor.In the empirical section of this paper we test this argument by studying the impact of the reputations of producers and directors on the investment decisions of the three main investors in the Dutch film industry: distributors, television broadcasters and the Film Fund. We find support for our main theoretical argument, IntroductionAn adequate resource base (Brush, Greene, Hart and Haller, 1993;Davidson and Honig, 2003;Parker and van Praag, 2006), and especially adequate financing Earlier studies applied selection system theory to study competition in product markets. For example, how winning or being nominated for an award impacts box office revenues of mainstream or art-house films (Gemser et al., 2008). Employing selection system theory to better understand the financing stage further tests the usefulness of this framework and also extends the theory itself.Our empirical setting is the Dutch film industr...

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Section: Resultsmentioning

confidence: 99%

Section: Resultsmentioning

confidence: 99%

Section: Reputation and Selectionmentioning

confidence: 99%

Section: Reputation and Selectionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Nascent ventures competing for start-up capital: Matching reputations and investors

Ebbers

Wijnberg

2012

Journal of Business Venturing

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Reputations, Entrepreneurial

Rindova

Petkova

2015

Wiley Encyclopedia of Management

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The development of entrepreneurial reputation is associated with a number of unique challenges, not encountered by established firms. New ventures have to overcome three cognitive hurdles in order to build their reputations: attracting attention, gaining legitimacy, and earning positive evaluations. Overcoming each of these hurdles leads to developing the three constituent elements of entrepreneurial reputations: prominence, legitimacy, and competitive superiority. Entrepreneurial symbolic, social, and human capital contribute to the accumulation of entrepreneurial reputation.

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Social Status in Entrepreneurship

Milanov

2015

Wiley Encyclopedia of Management

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Drawing on a rich stream of sociological research, scholars of status have made important contributions to understanding of entrepreneurial phenomena. This article summarizes the extant thinking on status and introduces its definition, in order to discuss the relevance of the concept for scholars of entrepreneurship as well as, ways to operationalize the construct in empirical research. The article concludes with several considerations for future research.

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How much prestige is enough? Assessing the value of multiple types of high-status affiliates for young firms

Cited by 243 publications

References 80 publications

Nascent ventures competing for start-up capital: Matching reputations and investors

Nascent ventures competing for start-up capital: Matching reputations and investors

Reputations, Entrepreneurial

Social Status in Entrepreneurship

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