The Importance of New Venture Creation

The Importance of New Venture Creation

Research has shown that entrepreneurs are different from non-entrepreneurs and that there is a need for to recognise the diversity among entrepreneurs and their new ventures. This is done by classifying entrepreneurial ventures according to a broad set of parameters. New ventures can be distinguished along four dimensions: individuals, processes, environments, and organisations. Developing a new venture is a complicated process and includes several phases, such as ideation, exploration, planning, and launching a business.1 In the exploration phase, the focus is on identifying an opportunity or idea that could be developed in the next phase of planning, before launching the business. The planning phase is executed in the three stages of inductive reasoning, ascertaining uncertainty, and investigating legitimacy. In the launch phase, the final reshaping of the idea enables entrepreneurs to launch their new business venture in line with their vision. 

The main purpose of NVC is to transform an opportunity into a viable new business. The process of NVC provides an overall view of the “big picture” of the business to inform decisions in relation to the required investment in the new business. NVC allows entrepreneurs to investigate all the possible advantages and disadvantages of an opportunity to decide on moving forward with a business idea. The NVC process is complex and differs for entrepreneurs based on the dissimilar environments in which they operate.2 The NVC process requires entrepreneurs to take charge of the success equation and to become comfortable with ambiguity and risk3 and to continuously problem-solve and strategize for what lies ahead of NVC.

1Kirkley (2016), 2Moroz and Hindle (2012), 3Spinelli and Adams (2016)

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