This paper examines the common behavioral characteristics of entrepreneurs backed by venture capital companies; the results will hopefully prove helpful to venture capitalists in their screening process. Some authors (Timmons, Swollen and Dingee 1977) assume that the success of a new venture is influenced by the fit between entrepreneurial team characteristics and product and market characteristics. If this is the case, it is crucial for venture capitalists to evaluate not only team characteristics and product/market characteristics separately, but also such fit before deciding to invest in a project. Venture capitalists have excellent capabilities for assessing product and market assumptions, which are easier to measure than behavioral characteristics. The evaluation of the management team is therefore their most challenging task in the venture selection process. Goslin and Barge (1986) reported that management team and entrepreneurial qualities have a greater impact than any product and market considerations on the venture capitalist's selection process. The purpose of this study is to determine which entrepreneurial team characteristics are useful predictors of performances, given product and market characteristics of the new venture. The research was conducted using the data base of MacMillan, Zemann and SubbaNarasimha (1987), who collected data for successful and unsuccessful ventures relating to the entrepreneurial team, product/service characteristics, market characteristics, and venture performance characteristics. A sample of 151 ventures rated by venture capitalists was cluster analyzed on the basis of product/service and market characteristics, in the expectation that different types of ventures in different contexts would call for different venture team or entrepreneurial characteristics. Four very different clusters were identified. Once cluster analysis was completed, regression analysis was run for each cluster to determine the entrepreneurial team characteristics most significant in predicting different performance variables. It was expected that different entrepreneurial team characteristics would be significant for each cluster. The results show that this is generally the case. On the whole, adjusted R-square values were encouragingly high and highly significant, indicating that different entrepreneurial characteristics were good predictors of performance for given product and market combinations. Moreover, there was an equally encouraging consistency of significant predictors across all the performance variables tested.

This paper examines entrepreneurial motivations to start a business in different perceived environmental settings. Motivations to start a business for a sample of 163 entrepreneurs (from growing and declining regions in the north, center and south of Italy) were factor-analysed in order to identify the main groupings of variables that lead people to start their own business. The results proved to be highly consistent with Friberg's (1975, 1976) findings on incentives to start a business. The motivation factor scores were then clustered, and three verv different classes of entrepreneurs were identified, each driven by very different sets of motivations: self actualizers who started their business driven by a thirst for achievement and a sense of independence and autonomy; discontented entrepreneurs unhappy with present working conditions: and followers of family tradition role models. The relationship between individuals' motivations and their perceptions of the environment was then investigated. Resources and incentives to start a business were factor- and cluster-analyzed to yield three very different types of perceived environments: munificent environments, characterized by efficient infrastructures, established capital markets and the availability of incentives to start a business: supportive environments, in which the creation of an infrastructure specifically aimed at encouraging new companies could lead to a significant increase in entrepreneurship; sparse environments, lacking both infrastructure and capital availability. The proportions of entrepreneurial types differ significantly in each environment. Government intervention in stimulating the diffusion of entrepreneurship is legitimized by the role new companies play in job and wealth creation and the diffusion of innovation within a territory. These results suggest some implications for public policies: Instead of blanket incentive policies applied on a wide geographical basis, policies tailored on a local basis may be more effective in stimulating new venture creation.