Legitimation of new ventures: the case of university spin-off

Considered as a crucial factor in resource acquisition, the search for legitimacy is a central activity in venture creation (Delmar and Shane, 2004). While some studies have discussed this challenge for new firms, none to date... [ view full abstract ]

Considered as a crucial factor in resource acquisition, the search for legitimacy is a central activity in venture creation (Delmar and Shane, 2004). While some studies have discussed this challenge for new firms, none to date have used the issue of legitimation to analyse the creation of a university spin-off. This search is particularly challenging in the case of university spin-offs as such business entities require very specific resources and are characterised by their close relationship with their parent organisation (the university). Focusing on strategies used by nascent entrepreneurs during the emergence phase (Tornikoski and Newbert, 2007), our research is based on a longitudinal case study of a spin-off in real time (Wolley, 2011) monitored over a 3-year period. Our study gives us insights into the legitimation process in all of its three dimensions: pragmatic, cognitive and moral (Suchman, 1995). Our findings underscore the importance of examining all the dimensions of legitimacy. They also help us to understand the interactions between these dimensions and the positive or negative impact on a nascent venture caused by the search for legitimacy with the different stakeholders. Finally, our findings underscore the central role of the search for moral legitimacy with the university.