The Second Most Important Pitch: How Nascent Digital Ventures Build Credibility by Briefing Analysts

It is well known that if nascent ventures secure coverage from an intermediary, this enhances their credibility, but detailed examination of how intermediaries decide to focus attention on particular ventures, and what their backing provides, are rare. Based on an inductive qualitative study in the digital area, we develop a process model describing the mechanisms by which digital ventures engage with intermediaries along a continuum where they move from being an unknown quantity to participating in their screening processes to being able to leverage intermediary support as a credibility strategy. We reveal how it is becoming common for nascent ventures to pitch to intermediaries to win their attention rather than carry out generic market actions as suggested by the literature. Through drawing on valuation studies scholarship, we identify the critical processes in these pitches that facilitated movement along the continuum. Our study extends understanding of why nascent ventures successfully pitching to analysts and receiving positive evaluations is essential in furthering their growth and development.