Overcoming Liability of Newness through Socialization : How Legitimation Strategies of a New Venture evolve

Liability of newness, the tendency of new ventures to die early after market entry, results from lacking legitimacy in their new cultural context and according failure to acquire resources. Based on a longitudinal case study on repeated resource acquisition attempts of a new venture, we found that overcoming liability of newness depended on the socialization of the new venture to the normative environment on which it depended on for resources. Over time and across repeated resource acquisition attempts, socialization - the process of learning the use of legitimate symbols and their culturally contingent meanings - enabled the new venture to become the skillful cultural operator on which legitimation and resource acquisition was contingent. From our data, 'Accumulating a repertoire of legitimate symbols' and 'Assimilating the evaluations of resource-holders' emerged as the two primary mechanisms for new venture socialization. The study's contributions to related literature and its broader theoretical implications are discussed

How Entrepreneurs Become Skilled Cultural Operators

Cultural entrepreneurship and symbolic management perspectives portray entrepreneurs as skilled cultural operators and often assume them to be capable from the outset to purposefully use ‘cultural resources' in order to motivate resource-holding audiences to support their new ventures. We problematize this premise and develop a model of how entrepreneurs become skilful cultural operators and develop the cultural competences necessary for creating and growing their ventures. The model is grounded in a case study of an entrepreneur who set up shop and sought to acquire resources in a culturally unfamiliar setting. Our model proposes that two adaptive sensemaking processes - approval-driven sensemaking and autonomy-driven sensemaking - jointly facilitate the gradual development of cultural competences. These processes jointly enable entrepreneurs to gain cultural awareness and calibrate their symbolic enactments. Specifically, while approval-driven sensemaking facilitates recognizing cultural resources to symbolically couple a venture's identity claims more tightly with the cultural frames of targeted audiences and gain legitimate distinctiveness, autonomy-driven sensemaking enables recognizing cultural constraints and more effective symbolic decoupling to shield the venture from constraining cultural frames and defend the venture's autonomy and resources. We conclude the paper with a discussion of the theoretical implications of our study for cultural entrepreneurship and symbolic management research.

Human Capital and New Venture Performance: The Moderating Role of Social Relations

With whom should entrepreneurs create their firms in order to enhance nascent venture performance? Conventional wisdom suggests that the stronger human capital and social relations in nascent venture teams are, the better the nascent venture’s performance. We draw from social embeddedness literature, however, and argue that the positive effect of team members’ human capital on three different dimensions of nascent venture performance is weaker when team members exhibit strong social relations. Our analysis of 488 nascent venture teams in the PSED II dataset confirms our predictions, showing that nascent ventures of teams with strong human capital but weaker social relations exhibit the best performance. The study thus offers valuable contributions particularly to literature on entrepreneurial teams the determinants of new venture performance.