Abstract
This paper proposes a set of conditions under which high-status firms retain their positions, even if they lose resources. Firms are considered high status if they obtain ties from other high-status firms. Within the class of high-status firms, we distinguish between those that receive ties only from high-status firms and those that also receive ties from low-status firms. Although ties from low-status firms contribute little to a firm's status, we hypothesize that they play a critical role in maintaining it in the event of resource loss. Specifically, following resource loss, high-status firms without ties from low-status firms will lose their status, but those with ties from low-status firms will retain it. Results of an empirical examination of venture capital syndicate formation in the United States yield support for these predictions.
Keywords: Business Ventures;
Venture Capital;
Financial Condition;
Alliances;
Rank and Position;
Status and Position;
Financial Services Industry;
United States;