Entrepreneurs face several challenges when forming a new venture (NV) resulting, in a large part, from its newness and small size. For NVs commercializing new products, these “liability of newness” (LoN) and “liabilities of smallness” (LoS) challenges must be successfully overcome to increase the probability of its long-run success. These liabilities arise, in part, because NVs often lack both the legitimacy and reputation needed to gain support from external resource providers. Although entrepreneurship studies have often classified both newness and smallness as liabilities, other research demonstrates that new (and often small) entrants can drive innovation (Schumpeter, 1934), suggesting some NVs may successfully overcome these liabilities. Indeed, recent theoretical (Carayannoupoulous, 2009) and empirical (Choi & Shepherd, 2005) research suggests potential advantages (e.g., decision speed and product novelty) NVs enjoy when commercializing products.

Taken together, these two views suggest that whether a NV successfully overcomes LoN and LoS issues often depends on whether it can establish its legitimacy and reputation, which represent related, but distinct, firm attributes (Deephouse & Carter, 2005). Accordingly, we examined factors impacting NV commercialization success by examining legitimacy, reputation, and technological innovativeness issues.