1. Clay Dibrell Associate Professor of Entrepreneurship and Strategy
Start-Up Challenges and Solutions: Legitimacy Strategies for Burgeoning Companies
Clay Dibrell
Associate Professor
of Entrepreneurship and Strategy

2. Research Questions
How do start-up firms overcome liability of newness?
How do start-up firms capitalize on being new?
How do start-up firms gain legitimacy?
Who are the key stakeholders enabling or preventing a firm to attain legitimacy?
What role does family play in a firm gaining legitimacy?

3. Anecdotal Evidence Food Processor Exec
You have to be at trade shows 3-5 years before people notice you.
Former HP Exec in charge of working with start-up firms
Most start-ups just do not understand what customers want. The product is often cool, but commercially unviable. If do get it, then they are often unable to meet demand. It is very frustrating to work with a start-up.
Former Ralph Lauren Exec
My experience has been that startups need to hang on until some fortunate event that takes them over the top.

4. Legitimacy defined
“a social judgment of acceptance, appropriateness, and desirability, [enabling them]…to access other resources [including customers] needed to survive and grow” (Zimmerman and Zeitz, 2002)

5. Legitimacy – Food Business
Recognized approval and acknowledgement by food processing industry suppliers, buyers, competitors, and regulatory agencies that a given firm is a business with staying power
A viable partner and competitor within the fraternity of food processing entities

6. Theory Surrounding Legitimacy
Institutional Theory
Resource-Based View
Strategies for gaining legitimacy
Conformance – be like everyone else
Selection – locate a start-up in a growing area
Manipulation – innovation of new products
Creation – creating a new industry

7. Theory Surrounding Legitimacy
Different forms of legitimacy
Regulative, normative, cognitive, industry
Different levels of legitimacy
Regional, company, individual
Resources for the start-up
Incremental accumulation of human, financial, intellectual, other resources

8. LEGITIMACY PROCESS MODEL
(Zimmerman and Zeitz, 2002)
Firm
Strategies
Firm
Legitimacy
Firm
Resources
Survival
Growth