STUART, Toby E <br/><br/>
interorganizational endorsements and the performance of entrepreneurial ventures 

 - Ithaca :  Johnson Graduate School of Management,  June 1999 
<br/><br/> This paper investigates how the interorganizational networks of young companies affect their ability to acquire the resouces necessary for survival and growth. We propose that, faced with great uncertainty about the quality of young companies, thir parties rely on the prominence of the affiliates of those companies to make judgements about their quality and that yound companies "endorsed" by prominent exchange partners will performance better than other wise comparable ventures that lack  prominet associates. Results of an empirical examination of the rate of initial public offering (IPO) and the  market caitalization at IPO of the members of a large sample of venture-caital-backed biotechnology firms show that privately held biotech firms with prominent strategic alliance partners and organiazational eqity investors go to IPO faster and earn greater valuations at  IPO than firms that lack such connections. We also empiriaclly demonstrate that muchof the benefit of having prominent affiliates stems from the transfer of status that is an inherent b product of interorganizational associations