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Managing Transparency and Legitimacy in Startups

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New Frontiers in Entrepreneurial Fundraising

Part of the book series: Contributions to Finance and Accounting ((CFA))

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Abstract

In recent years, society and companies have faced numerous crises, which have devastated not only the economy but also the confidence of stakeholders, especially that of investors and funders. This fact has resulted in entrepreneurs fighting to raise funds for their projects, regardless of the life phase of their projects. In this sense, the scientific evidence literature indicates that reducing the asymmetry of information between a company and a funder or investor is necessary. The responsible management of companies and how they disclose non-financial information translates into an improvement in transparency, having an impact on reputation, image, legitimacy, and results and therefore on improving access to new funds and better conditions. This chapter discusses the importance of transparency as a form of engagement with stakeholders and especially with funders. The development of new technologies acts in favor of transparency in that society can obtain information from companies at the click of a button. That is why companies must maintain an attitude of resilience to changes in the environment. So, the challenge is to know how to use these variables to their advantage, that is, how appropriate use of information and transparency allows them to send positive signals to an increasingly demanding market with companies.

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Author information

Authors and Affiliations

  1. Department of Business Economics, Universidad Rey Juan Carlos, Madrid, Spain

    Sandra Escamilla-Solano

  2. Department of Financial Economics and Accounting, Universidad de Extremadura, Cáceres, Spain

    Antonio Fernández-Portillo

  3. Department of Entrepreneurship of the North Region, Tecnológico de Monterrey, Monterrey, Mexico

    Javier de la Fuente Flores

Authors
  1. Sandra Escamilla-Solano
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  2. Antonio Fernández-Portillo
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  3. Javier de la Fuente Flores
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Corresponding author

Correspondence to Antonio Fernández-Portillo .

Editor information

Editors and Affiliations

  1. Department of Corporate Finance and ERICES, Universitat de València, Valencia, Spain

    Pau Sendra-Pons

  2. Department of Business Management, Universitat de València, Valencia, Spain

    Dolores Garzon

  3. Department of Business Administration and Marketing, Universidad de Sevilla, Sevilla, Spain

    María-Ángeles Revilla-Camacho

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Escamilla-Solano, S., Fernández-Portillo, A., de la Fuente Flores, J. (2023). Managing Transparency and Legitimacy in Startups. In: Sendra-Pons, P., Garzon, D., Revilla-Camacho, MÁ. (eds) New Frontiers in Entrepreneurial Fundraising. Contributions to Finance and Accounting. Springer, Cham. https://doi.org/10.1007/978-3-031-33994-3_9

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