Does money matter?: Wealth attainment as the motive for initiating growth-oriented technology ventures

The desire to attain personal wealth has long been regarded as the foremost motive for entrepreneurship. Other goals and values, however, may also con tribute to entrepreneurial motivation. Thus; the extent to which money matt ers relative to other motives is an empirical question. In this study we ex amine the role of wealth as the motive for the decision to found new ventur es. Three focal questions guide our research: 1) does money matter more rel ative to other decision dimensions in deciding to start a new high-technolo gy venture? 2) does money matter more to entrepreneurs compared to non-entr epreneurs? and 3) does money matter in absolute terms, that is, does a deci sion model that focuses solely on the motive of wealth attainment parsimoni ously predict entrepreneurs' start-lip decisions? We conducted in-depth interviews with 51 entrepreneurs and a control group of 28 senior managers who decided not to start ventures (non-entrepreneurs) in the high-technology industry in British Columbia to address our researc h questions. The motives we examined are wealth attainment and an aggregate of other dimensions identified by entrepreneurs and managers. We consider- ed three components of values: participants' ratings of the importance of v arious decision dimensions, their rating of the salience of these dimension s, and their satisfaction with prior levels of attainment on those decision dimensions. We assessed beliefs as participants' perceived probability of attaining desired level of a particular decision dimension in each of three alternatives: the position held at the time the venture decision was made, the venture itself; and the next best career alternative at that time. The data were analyzed to compare entrepreneurs' values and beliefs regarding wealth with an aggregate of other decision dimensions (our relative hypothe ses, and with those of non-entrepreneurs (our comparative hypotheses). Our findings do not support the common perception that money is the only, o r even the most important, motive for entrepreneurs' decisions to start new ventures. Wealth attainment was significantly less important to entreprene urs relative to an aggregate of 10 other decision dimensions, and entrepren eurs did not rate wealth as any more important than did non-entrepreneurs. Non-entrepreneurs rated wealth res no more important than other motives. We alth attainment was also significantly less salient to entrepreneurs' decis ions to venture than were other motives. Non-entrepreneurs reported that we alth,was significantly more salient to their decision against founding a ve nture than other dimensions. In fact, non-entrepreneurs rated wealth attain ment as significantly more salient to their decision against founding than entrepreneurs rated it for their decision to proceed with starring a high-t echnology business. A significant number of entrepreneurs starred businesse s even when they believed that doing so offered them a lower probability of obtaining their most desired level of wealth than did one of their other a lternatives. Satisfaction ratings and stated beliefs also dispute classical predictions. Just prior to making the decision to venture, the entrepreneurs in our stu dy were as satisfied with wealth as they were with other decision dimension s. The non-entrepreneurs were actually more satisfied with wealth attainmen t than with other dimensions. A comparison of the groups revealed no differ ence in satisfaction with wealth attainment levels. Entrepreneurs did belie ve that their chances of attaining their desired level of wealth were much greater through founding a new high-technology venture than through their o ther alternatives. This difference in beliefs, however, was not significant ly greater than their optimistic beliefs about chances of attaining desired levels of other dimensions. It was significantly higher compared to the no n-entrepreneurs' belief difference measures for wealth. In fact, the entrep reneurs' stated beliefs regarding the chances of attaining their desired le vels of all dimensions were higher than those of the non-entrepreneurs, sug gesting that entrepreneurs were simply more optimistic at the time of their decision than non-entrepreneurs.Salience findings suggest that these optim istic beliefs about wealth did nor motivate the founding decision alone We can distinguish those people who successfully started ventures by their regard for wealth as a less salient factor, and their beliefs in higher cha nces of a venture producing monetary and other returns. Other motives, such as innovation, vision, independence, and challenge were more important and much more salient to this sample of entrepreneurs. Our findings have implications for practice, teaching, and research. Ventur e capitalists who partially base their assessment of entrepreneurs on the e xtent to which they are motivated to make a great deal of money may benefit from reconsideration of this criterion. We have evidence of one group of h igh-technology entrepreneurs who achieved success without placing much deci sion weight on attainment of personal wealth. Nascent entrepreneurs and tho se who teach entrepreneurship can use this empirical finding to argue two m ain points: 1) not all entrepreneurs found a business for personal wealth r easons, and 2) one need nor be motivated by personal wealth attainment to b e a successful entrepreneur. Similarly, theoretical models that assume mone y is the primary motive for entrepreneurial activity require re-examination . Future research in entrepreneurship should focus less on wealth attainmen t and more on other motives for the venturing decision. A multiple-attribut e decision model may be able to more fully explain venturing decisions. (C) 2000 Elsevier Science Inc.