Abstract

Resource acquisition is critical for new venture development and growth. However, potential resource providers often rely on credible signals to make decisions due to a lack of track record and information asymmetry of the new ventures they might invest in. We argue that different firm characteristics, such as founders’ human capital and endorsement from prominent investors, have positive effects on resource acquisition. Importantly, we argue that the importance of these factors differs depending on the stage of development as they send signals of legitimacy. We look at various types of signals at different stages of firm development in a sample of 307 new ventures in the advertising industry.

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