Moreover the affiliative effects held up in models

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ventures. Moreover, the affiliative effects held up in models that included a comprehensive set of control variables cap- turing firm differences and environmental conditions. Build- ing a new company is a highly competitive endeavor, and it is difficult to overstate the advantages of having the right intercorporate relationships when competing to create a vi- able organization. The results raise several points worth emphasizing about the impact of interorganizational relationships on the perceived value of new ventures. First, the analyses clearly demon- strate that sponsorship has the capacity to substitute for ac- complishment and experience as a basis for the success of young companies. In both the valuation and the rate models, the exchange partner's prominence had much stronger ef- fects on the performance of companies about which there was high uncertainty. This contingency in the impact of affili- ations is exhibited by the precipitously declining effects of the partner prominence variables as firms age and as they garner greater amounts of venture capital funding. By the same token, experience and accomplishments take on added significance for firms that lack notable sponsors. For instance, models 8 and 9 in table 4 show that each addi- tional year of age increases the predicted market value by approximately 20 percent for firms that have no strategic alliance partners and no organizational equity investors (the effect of a one-year change in organizational age evaluated at zero affiliate prominence). The implications of the positive correlations among the affili- ate-prominence variables (table 2) also merit emphasis. Based on the bivariate correlations and the fact that the mag- nitude of the coefficients on each of the prominence vari- ables declined when all of the prominence variables were entered in the same models, we suspect that new ventures that obtained prominent exchange partners tended to do so 344/ASQ, J une 1 999
Endorsements across the board: firms that had well-known equity partners were more likely to have prominent alliance partners and to use prestigious investment banks. The tendency for firms that obtain a highly regarded exchange partner to gain others is not surprising. When a new venture secures a prominent exchange partner, that partner often serves as an ally, intro- ducing the company to its associates. For example, Bygrave and Timmons (1992) noted that high-status venture capital firms maintained close relationships with leading investment banks. Thus, start-ups funded by leading venture capital firms tended to secure prestigious investment banks to syn- dicate their IPOs. Moreover, our theory suggests that in ad- dition to gaining access to the contacts of a prominent affili- ate, young companies gain attention and recognition when they first obtain a prominent associate. This recognition may facilitate the acquisition of additional, well-known exchange partners, creating the possibility of a cumulating cycle of ad- vantage accruing to young firms that gain prominent organi- zational associates.

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