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.
