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From signalling to endorsement: The valorisation of fledgling digital ventures
[Vom Signalisieren zur Unterstützung: Die Aufwertung junger digitaler Unternehmen]

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  • Klus, Milan Frederik

Abstract

Despite extensive research on the liability of newness of young firms and what they can do to reduce information asymmetries, relatively little is known about how young digital ventures' growth and scaling is affected by different forms of endorsement. With a focus on third-party endorsements from industry analysts, I approach this question using a two-stage research design. First, I empirically examine the connection between awards given by industry analysts and the funding of digital ventures. I use the example of the Cool Vendor award given by the analyst firm Gartner and focus on the fintech domain. Using semi-structured interviews, I then identify and explain different forms of endorsement from a digital venture perspective, thereby differentiating between pure market signals and more sophisticated mechanisms. This differentiation is presented in a conceptual framework, which I propose as a supplement to the signalling literature. This paper promotes a better understanding of what helps fledgling digital firms to develop and prosper.

Suggested Citation

  • Klus, Milan Frederik, 2020. "From signalling to endorsement: The valorisation of fledgling digital ventures [Vom Signalisieren zur Unterstützung: Die Aufwertung junger digitaler Unternehmen]," Discussion Papers of the Institute for Organisational Economics 3/2020, University of Münster, Institute for Organisational Economics.
  • Handle: RePEc:zbw:umiodp:32020
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    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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