Determinants of exploitation of innovative venture ideas : A study of nascent entrepreneurs in an advisory system

Abstract: This study contributes to nascent entrepreneurship research by investigating factors on the individual and opportunity levels of analysis that determine the exploitation of innovative venture ideas. As a result of the literature review three theoretical perspectives were chosen to organize the factors: human and social capital, entrepreneurial self-efficacy, and domain definition strategy. The analysis of the chosen factors is based on hypotheses formulated on the basis of the literature review concerning the impact of the factors on the performance of nascent entrepreneurs during the discovery process. Empirical data were collected from the survey of 409 nascent entrepreneurs who addressed a public advisory agency in Stockholm area.Research findings show that among all factors, statistically significant predictors of exploitation of venture ideas are social capital in terms of the contact with counselors and number of ties with different actors, planning and marshaling self-efficacy, initial investment, tangibility and innovativeness of the future offerings. As for the direction of relationships, too many ties with different networks and higher planning self-efficacy influence exploitation in a negative way. Among variables related to domain definition strategy, entrepreneurs with innovative venture ideas based on services have higher probability of exploiting their ideas. Those who have made initial investment into the development of venture ideas and have a frequent contact with counselors are more likely to continue exploitation efforts. Of five dimensions of entrepreneurial self-efficacy, higher marshaling self-efficacy was shown to positively contribute to the exploitation process.It is especially difficult during the early stages of entrepreneurial process to predict which venture ideas will survive, thus, nascent entrepreneurship assistance should encourage experimentation. Although it is difficult to make generalizations from the study about nascent entrepreneurs in the Stockholm area, it can be advised to encourage the development of new services and enhance the entrepreneurial potential of nascent entrepreneurs by developing their entrepreneurial self-efficacy, especially marshaling self-efficacy.