THE IMPORTANCE OF LEGITIMACY BUILDING WHEN PREPARING FOR A TRADE SALE.

The article analyzes managerial actions such as legitimacy-building that make the strategic choice of a trade sale more likely and which create value to enhance the success of a trade sale. Legitimacy theory is considered in the analysis of management's strategic actions that optimize the likelihood that a young technology-based firm will be acquired and its acquisition price. The importance of gaining legitimacy for entrepreneurial ventures is explored. The belief that a venture is legitimate is cited as a vital motivator for external parties to provide a new venture with resources. The pragmatic legitimacy, moral and cognitive legitimacy types of legitimacy-building are also addressed.