Converting ties into trust How networks, entrepreneurial capabilities, and legitimacy, shape the survival of early-stage medical device startups

Sammanfattning

Building and sustaining a new venture is inherently difficult with more than two-thirdsnever delivering a positive return to investors. The medical device industry presents a particularlyinteresting context in which to study this, characterised by extensive regulation,long capital-intensive development timelines, and the need to satisfy multiple demandingstakeholders, including patients, clinicians, investors, and regulatory bodies.This study explores how early-stage medical device startups (MDSs) build legitimacythrough network development, and how these processes shape venture survival. An exploratoryqualitative approach was adopted, drawing on fifteen semi-structured interviewswith MDS founders, support organisation representatives, and experts across primarilythe DACH region and the United States. The data were later analysed through thematicanalysis.The findings show that transitioning from outsider to insider within the established industrynetwork is an iterative process driven by persistent weak-tie cultivation, repeatedinteraction, and sustained visibility at industry events. Affiliation with supporting actors -universities, hospitals, incubators, and advisory boards - accelerates both network accessand legitimacy signalling through spillover effects. Legitimacy emerges as a continuous,multi-source process in which clinical data constitutes the primary currency, but must becomplemented by additional legitimacy signals to satisfy key stakeholders. Team compositionis identified as a critical and often underestimated factor, with dysfunction found toactively block access to capital and damage legitimacy.The central contribution of this study is that networks, entrepreneurial capabilities, andlegitimacy are interdependent and form a self-reinforcing system. Entrepreneurial capabilitiesfunction as the connective mechanism enabling founders to translate networkrelationships into legitimacy signals and vice versa. They enable and constrain eachother, and it is the founder’s ability to develop and maintain momentum across all threesimultaneously that determines early-stage MDS development.