Negotiating Strategies

A critical precursor to new venture growth is the attainment of initial legitimacy, which is a social judgment of acceptance and appropriateness. Thus, before new ventures are able to gather the tangible resources necessary to survive and grow, such ventures must receive initial legitimacy from resource providers. However, a new venture cannot take legitimacy; rather, stakeholders must grant it to the venture. Hence, new ventures face a conundrum: The founder needs to persuade key stakeholders to grant the new venture legitimacy, yet the new venture does not possess many attributes of a legitimate firm. Entrepreneur negotiation strategy is a tool that will enhance new firms' chances to be granted legitimacy.