New ventures have been recognized as the most important power for economic development and wealth creation (Christensen and Bower, 1996). A recent meta-analysis, however, revealed that the survival rate among US technology ventures is low (Song, Podoynitsyna, Van der Bij, and Halman, 2008). The findings suggested that, after four years, only 36 percent of companies survived. After five years, the survival rate fell to 21.9 percent.

Based on their prominent publications, Shane and his colleagues argued that legitimacy is a critical determinant for new venture survival (Shane and Foo, 1999; Delmar and Shane, 2004). Gaining organizational legitimacy and social acceptance can overcome the liability of newness.

In their theoretical work, Zimmerman and Zeitz (2002) outlined three key sources of legitimacy: cognitive, regulative, and normative residing within the psyches or social actors. However, prior research failed to adopt and test this classical categorization. As Suchman (1995) noted, “most treatments cover only a limited aspect of the phenomenon as a whole and devote little attention to systematizing alternative perspectives (p. 572).”

The purpose of this paper is to link venture’s early stage performance with all three types of legitimacy including cognitive, regulative, and normative.