The Reputation Factor in Start-up Companies: A Literature Review

Proceedings of ‏The 7th International Conference on Opportunities and Challenges in Management, Economics and Accounting

Year: 2021

DOI:

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The Reputation Factor in Start-up Companies: A Literature Review

Enrico Gonnella and Lucia Talarico

 

ABSTRACT: 

The paper analyzes the concept of reputation with particular reference to startup companies. The definition of ‘reputation’ that has inspired this work is that of a judgement of reliability expressed by a community about a social player based on the behaviour of that player over time. The peculiarity of this judgement is that only one or some of the members of the community have had direct knowledge of the player and their actions, and it is on this experience that they have based their personal judgements of value. The authors carried out a literature review in order to analyze the constituent factors of reputation. What emerges is that the reputational issue is configured with marked peculiarities in startups, in particular in the pre-revenue phase, when the startup has not yet matured its history. The reputation of the pre-revenue startup, in fact, since it cannot be the product of its activity, is the product of the activity and behaviour of the founder and, more generally, of his team; in other words, the reputation of the latter becomes the reputation of the startup. Furthermore, it is a fundamental competitive lever for the startup, as it affects the ability to raise funds. Effective reputation management, therefore, cannot ignore the consideration of the life phase of the company and the nature of the subjects to which the reputational factors refer.

Keywords: reputation; startup companies; venture capitalists; business angels.