Al. Zacharakis et al., Differing perceptions of new venture failure: A matched exploratory study of venture capitalists and entrepreneurs, J SM BUS M, 37(3), 1999, pp. 1-14
Using an attribution theory viewpoint this exploratory study examines new v
enture failure from the perspectives of both the entrepreneur and the ventu
re capitalist (VC). Contrary to what should be expected, given attribution
theory, entrepreneurs acknowledge that internal causes contributed to their
venture's failure. On the other hand VCs attributed the failure to externa
l causes, differing from the enterpreneur's perception of the event. Both t
he entrepreneur and VC were more likely to attribute the failure of other v
entures to internal factors (the fundamental attribution error). This study
suggests that entrepreneurs and VCs view failure differently. These differ
ences might cause misapplication of scarce entrepreneurial resources.