Abstract:
Venture ideas are at the heart of entrepreneurship (Davidsson, 2004). However, we are yet to
learn what factors drive entrepreneurs’ perceptions of the attractiveness of venture ideas, and
what the relative importance of these factors are for their decision to pursue an idea.
The expected financial gain is one factor that will obviously influence the perceived
attractiveness of a venture idea (Shepherd & DeTienne, 2005). In addition, the degree of
novelty of venture ideas along one or more dimensions such as new products/services, new
method of production, enter into new markets/customer and new method of promotion may
affect their attractiveness (Schumpeter, 1934). Further, according to the notion of an
individual-opportunity nexus venture ideas are closely associated with certain individual
characteristics (relatedness). Shane (2000) empirically identified that individual’s prior
knowledge is closely associated with the recognition of venture ideas. Sarasvathy’s (2001;
2008) Effectuation theory proposes a high degree of relatedness between venture ideas and the
resource position of the individual. This study examines how entrepreneurs weigh
considerations of different forms of novelty and relatedness as well as potential financial gain
in assessing the attractiveness of venture ideas.
