Entrepreneurial Strategies of High Growth Start-ups: Building Legitimacy or Attracting Customers?

We explore the growth strategies that are deployed by young technology based firms, which have a commitment to growth. Based on six case studies of high growth firms that pursued different growth strategies, we build theory on why some firms grow in terms of revenue while others grow by building value; two firms grew in employment, two firms grew revenues and two firms grew in terms of both employment and revenues. We obtained rich data from face to face interviews and a range of archival sources. We find that revenue oriented companies focus on growth through attracting customers. Exit-oriented companies grow in terms of employees not revenues and try to build up legitimacy in the market for investors and acquirers through signaling experience and quality of managers as well as technology quality. Young technology firms which show both high growth in revenues and employees create legitimacy through acquisitions of complementary assets downstream in the value chain; these companies face a weak appropriability regime and a market which has to be created.