Thin Markets, Thick Ties, and Thinking Machines: Institutional Environments, IPO Markets, Technological Disruption, and New Venture Performance in Central Europe

New ventures in Central Europe grow up inside institutional environments that are neither fully mature nor fully void. Formal rules have converged on European Union standards, yet capital markets remain thin, informal ties remain consequential, and successful technology ventures frequently exit to foreign exchanges. At the same time, artificial intelligence and related digital technologies are altering what a new venture is, who acts on its behalf, and how investors evaluate it. This conceptual paper integrates institutional theory, signaling and legitimacy perspectives on initial public offerings, and research on technological disruption to explain how these forces jointly shape new venture performance in the region. We develop seven propositions. We argue that the IPO operates as a legitimacy substitute whose value rises where market-supporting intermediaries are weak, that positive media sentiment exhibits a too-much-of-a-good-thing effect that is sharper in thin markets, and that founder drive pays off most when paired with political skill in particularistic settings. We further propose that category-breaking ventures face an initial valuation discount but superior long-run performance, that artificial intelligence acting as an entrepreneurial actor weakens the dependence of performance on local institutions, and that organizational scope and supranational harmonization condition these relationships. We conclude with a research agenda and implications for founders, investors, exchanges, and policymakers.