Which opportunity to pursue

In the video we gave you a general idea of what factors you need to take into account when assessing whether your idea is worth pursuing.

There are a number of external factors that need to be assessed closely by an entrepreneur. These factors are also used by investors to assess the new venture. Prior studies show that investors make their decisions based on specific characteristics of entrepreneurs, strategy, teams, industry characteristics, market and technology potential (Gartner, et al. 1998; Franke et al., 2008; Chen et al., 2009; Frei, 2004).

Hindle and colleagues (2007) in the VIQ (Venture Intelligence Quotient), emphasise the role of 5 pillars in opportunity evaluation, namely product, market, industry, people, and money. Each of the pillars has to be evaluated at three levels: idea assessment, idea enhancement, and venture implementation. Those who have an idea and want to become an entrepreneur, might get familiar with this particular model and use it to evaluate their idea.

Recommended reading:

Hindle K., Mainprize B., Dorofeeva N. (2007). Venture Intelligence: How Smart Investors and Entrepreneurs Evaluate New Ventures, Melbourne: Learnfast Press

References

Chen X.-P.,Yao X., and Kotha S. (2009) Entrepreneur Passion And Preparedness In Business Plan Presentations: A Persuasion Analysis Of Venture Capitalists’ Funding Decisions. Academy of Management Journal, 52(1): 190-214.

Franke, N., Gruber, M. , Harhoff, D. and Henkel, J. (2008), Venture Capitalists’ Evaluations of Start‐Up Teams: Trade‐Offs, Knock‐Out Criteria, and the Impact of VC Experience. Entrepreneurship Theory and Practice, 32: 459-483

Frei, P. (2004). Qualitative Analysis of High-Growth Companies. CHIMA International Journal for Chemistry, 58(11): 803-804(2).

Gartner W.B., Starr J.A., Bhat S. (1999) Predicting new venture survival: An analysis of “anatomy of a start-up.” cases from Inc. Magazine, Journal of Business Venturing, 14(2): 215-232.