Events

Prof. Anne ter Wal
Professor of Technology and Innovation Management
Imperial College London

The networks-as-prisms perspective establishes that ventures seeking to acquire resources can signal legitimacy based on prominent positions in social networks. Meanwhile, the symbolic management perspective establishes that symbolic actions can equally convey legitimacy. What is less clear is how the prismatic effects of networks and symbolic actions interplay in entrepreneurial resource acquisition. In this study, we propose that generalized symbolic actions help ventures with low network prominence to attract investment, while fine-grained symbolic actions are more effective for ventures with high prominence. In line with these arguments, our analysis of a comprehensive dataset of London-based technology ventures combining Crunchbase, LinkedIn, and Twitter data shows that generalized actions that convey credibility and connectedness (i.e., mimicking conversational topics of role-model entrepreneurs and frequent engagement with events in the local ecosystem) are more effective for low-prominence ventures, whereas fine-grained symbolic actions conveying credibility and connectedness (i.e., spreading information about their own startup and high-status connections) aid resource acquisition primarily for high-prominence ventures. Our study contributes to theories of social networks, symbolic management, and entrepreneurship by documenting how symbolic actions can either amplify the legitimacy premium associated with prominent network positions or mitigate a shortfall in legitimacy arising from a lack of network prominence.