Expert Capital and Perceived Legitimacy

Abstract

Research has shown that female entrepreneurs face unique barriers to entrepreneurial success, such as procuring funding and being perceived as credible. Limited past theory has addressed how these challenges can be met effectively by female-run entrepreneurial ventures. As a result, effective strategies for female entrepreneurs to overcome them are unclear. To address the need for research in this area, the authors use signalling theory to guide an empirical study utilizing panel study data based on 711 entrepreneurial ventures (334 female-run; 377 male-run). Signals perceived by outsiders pertaining to the risk preference, legitimacy and social capital of female-run ventures are examined and linked to venture funding, net worth and longevity outcomes. The results, based on non-parametric analyses and statistical modelling, suggest that expert capital (social capital from experts) leads to perceptions of higher legitimacy and funding success for female-run ventures.