| Academy of Management Journal
Signals across Multiple Networks: How Venture Capital and Alliance Networks Affect Interorganizational Collaboration
In this paper, we examine the contingent effects of signals generated by different types of networks on new ventures' formation of future strategic alliances. We argue that the signaling value of a given tie in reducing adverse selection is more pronounced when another type of tie is lacking. In particular, we suggest that signals associated with (i) a new venture's affiliations with venture capitalists (VCs) that have prominent positions in syndicate networks and (ii) a new venture's prominent position in alliance networks resulting from previous alliances offer redundant benefits. As a result, the positive effect of VC prominence in determining a new venture's future alliance formation diminishes as the new venture's prominence in alliance networks increases. Evidence from biotech alliances between new ventures and established companies provides support for our theory.