Abstract

In this study we examine why, and under what conditions newly public firms avoid recruiting prestigious directors even when they have the ability to do so. Entrepreneurship scholars have explored how young companies lacking established track records seek to reduce others’ uncertainties by pursuing prestigious affiliations, thereby signaling their quality through these actors’ willingness to affiliate with them. In particular, scholars have studied how young firms that conduct initial public offerings (IPOs) benefit from affiliations with prestigious VCs (Lee, et al., 2011), underwriters (Gulati & Higgins, 2003), executives (Pollock, et al., 2010) and directors (Chen, et al., 2008).

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