The Role of Marketing Disclosures and Legitimacy in Raising New Venture Capital

摘要

New ventures of ten seek financial resources enhance development and growth.However such fund raising is of ten inhibited due to information asymmetry between new ventures and investors(Homburg et al.2014).Prior research suggests investors try to reduce information asymmetry by securitizing signals related to the quality of new ventures(Homburg et al.2014;Ko and McKelvie 2018).In the present study,we explore whether marketing disclosures by new ventures impact the ability to raise venture capital.Marketing disclosures are the messages and/or media content that a firm utilizes to communicate with other firms or individuals in a market(Duncan and Moriarty 1998).Founders of new ventures may utilize marketing disclosures to announce future directions or growth plans for their ventures,such as plans to develop new products and services or establish new alliances(e.g.,Xiong and Bharadwaj 2011).In this study,we show that marketing disclosures are an additional source of information that can serve as a reliable means of reducing information asymmetry between investors and new ventures.Marketing disclosures are in fact necessary as a lack of revenue in new ventures mitigates the usefulness of financial disclosures.Marketing disclosures can thus signal firm operational and strategic effectiveness in place of financial statements.