Managing Transparency and Legitimacy in Startups

In recent years, society and companies have faced numerous crises, which have devastated not only the economy but also the confidence of stakeholders, especially that of investors and funders. This fact has resulted in entrepreneurs fighting to raise funds for their projects, regardless of the life phase of their projects. In this sense, the scientific evidence literature indicates that reducing the asymmetry of information between a company and a funder or investor is necessary. The responsible management of companies and how they disclose non-financial information translates into an improvement in transparency, having an impact on reputation, image, legitimacy, and results and therefore on improving access to new funds and better conditions. This chapter discusses the importance of transparency as a form of engagement with stakeholders and especially with funders. The development of new technologies acts in favor of transparency in that society can obtain information from companies at the click of a button. That is why companies must maintain an attitude of resilience to changes in the environment. So, the challenge is to know how to use these variables to their advantage, that is, how appropriate use of information and transparency allows them to send positive signals to an increasingly demanding market with companies.