Past studies show that dependence on partners for resources also exposes firms to possible problematic partner behavior, against which firms try to defend themselves. We extend our understanding of resource dependence in entrepreneurial ventures by developing and testing a novel framework on how and which ventures can defend themselves in their first interaction with equity investors when established defenses are usually unavailable. We theorize and show that ventures with greater resource stocks (i.e., higher ex-ante cash holdings and prior experience with multiple investor types) defend themselves by pursuing a "divide and conquer"-strategy in which they attract first-round investments from different types of equity investors. This strategy also facilitates follow-on fundraising. Overall, we extend resource dependence theory by focusing on a novel "divide and conquer"-defense strategy, which limits the power of any individual investor type, and by presenting a dynamic view on resource dependence in which entrepreneurs employ defense strategies from a position of strength because they still hold greater resource stocks.
