Understanding Opportunity Evaluation Prototypes in Search of more Entrepreneurs

Background: In search of more entrepreneurs for economic development, academics and policy makers are continuously seeking ways in which the participation of potential entrepreneurs in the economy can be enhanced. Purpose: This study investigates whether entrepreneurial prototype factors could be identified to inform how entrepreneurs evaluate opportunities. Design/Methodology: In an experimental design, participants were requested to evaluate a single start-up opportunity. They completed a questionnaire exploring their thinking of the single case. Participants included 193 nascent and novice entrepreneurs that evaluated the same opportunity. The questionnaire was administered, leading to factor and regression analyses. Findings: The factor analysis identified four prototype factors for potential use in selection. Discrimination was possible between the prototype factors (cognitive frameworks) of novice (first-time) and repeat (experienced) entrepreneurs for “positive financial model”; “uniqueness of the idea”; “big markets”; and “intuition.” Significant differences for the identified factors were reported between those who decided for and against starting the venture. Regression analysis suggested further discriminatory value, with the prototype factors for the start-up decision contributing to a potential selection process by venture capitalists, as well as educators. Research limitations: The generalisability of the findings may be limited by the use of a single case evaluation. Originality/value: Firstly, support was found for the effectiveness of the methodology in identifying the prototypes. Secondly, the study contributes by informing educators of entrepreneurs about the relevancy of cognitive frameworks that could be developed to meaningfully enhance opportunity evaluation.