Seeing Differently, Acting Differently? New Venture Perceptions and Decisions of Managers and Successful Entrepreneurs

An experimental study was conducted in a sample of America’s most successful entrepreneurs and one of comparable large company managers to examine three research questions: Why do some individuals choose riskier ventures than do others? Do managers and successful entrepreneurs perceive new venture risk and potential differently? What accounts for differences, if any, in their decision‐making behavior? The findings are equally interesting for the effects we found and did not find. We found that differences in risk propensity and in situational factors like the market competencies brought to a particular venture influence risky new venture decision‐making; that perceptions of new venture risk and potential differ between managers and successful entrepreneurs, though in a direction opposite to that we hypothesized; and that individual differences, rather than group‐level differences, are primarily responsible for the degree of risk taken by managers and successful entrepreneurs. Taken together, our results call for further research at the marketing/entrepreneurship interface and research into differences between managers and entrepreneurs, using samples of highly successful entrepreneurs and comparable managers in established firms.