Alliances and legitimacy among technology-based start-ups

Technology based start-up firms have historic importance as outlets for new technology product. A major challenge for start-ups commercialising inventions is to attract enough external resources until they achieve mainstream market acceptance for new technology products. Lack of performance history and novel technologies combine to create liabilities that they must overcome to gain legitimacy in the eyes of stakeholders and gain access especially financial resources. This makes strategies to increase legitimacy and reduce the likelihood for failure among technology-based start-ups (TBS) a persistent pursuit in entrepreneurship research with strong implications for practice. Forging alliances with important stakeholders show relevance and indicate legitimacy. Using data from 173 start-ups working with energy efficient technologies, this analysis found evidence to suggest that forging alliances and the public declaration of these can influence legitimacy among TBS. The influence however, it not straight forward and has implication for both research and practice.