Pick the Odd-Ones Out! Conferring Legitimacy of Initial Coin Offerings By Distinction

In what ways do new entrepreneurial ventures gain legitimacy and attract critical resources? According to a growing body of cultural entrepreneurship research, new ventures require distinctiveness to stand out, but existing research suggests that distinctiveness counteracts with organizational legitimacy. We challenge this assumption that distinctiveness is counterproductive to achieving legitimacy and suggest that distinctiveness can serve as a source of legitimacy. The significance of this assumption lies in the fact that it fundamentally alters the relationship between distinctiveness and resources acquired from novelty-seeking audiences. We also show how online media affects the distinctiveness – resource acquisition tradeoff as a dichotomous instrument. Finally, based on our theoretical assumptions, we examine how new ventures acquire resources through initial coin offerings (ICOs). Our analysis of 306 ICOs across 29 market categories shows that while higher levels of distinctiveness may lead to superior ICO performance, public sentiments expressed on media can shift legitimacy.