IDEAS home Printed from https://ideas.repec.org/a/kap/jtecht/v48y2023i4d10.1007_s10961-022-09966-6.html
   My bibliography  Save this article

Do not judge a business idea by its cover: The relation between topics in business ideas and incorporation probability

Author

Listed:
  • Jessica Birkholz

    (University of Bremen)

Abstract

It is of key importance to identify the degree of novelty and probability of incorporation of business ideas in an early stage, so that targeted support of these different types of entrepreneurship is possible. Selection of business ideas for investments and support programs rely on quantitative and qualitative metrics. The qualitative assessment, however, is biased by subjective impressions and experiences of the decision-maker. Therefore, this paper examines the narrative of business idea descriptions to improve the identification of the degree of novelty and to enhance the estimation of the incorporation probability by advancing the objectivity of qualitative metrics. The paper aims to answer two questions: (1) Are there differences in topic prevalences in novel and non-novel business ideas?, and (2) Does the composition of topics related to a business idea influence its incorporation probability? Structural topic modelling and classification tree analysis are applied on business idea descriptions from a competition in Bremen, Germany, from 2003 until 2019. The results show that business idea descriptions are a rich source of information to identify novel and non-novel business ideas with higher incorporation prospects.

Suggested Citation

  • Jessica Birkholz, 2023. "Do not judge a business idea by its cover: The relation between topics in business ideas and incorporation probability," The Journal of Technology Transfer, Springer, vol. 48(4), pages 1327-1358, August.
    • Handle: RePEc:kap:jtecht:v:48:y:2023:i:4:d:10.1007_s10961-022-09966-6
    DOI: 10.1007/s10961-022-09966-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10961-022-09966-6
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10961-022-09966-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Michael Stuetzer & Martin Obschonka & Eva Schmitt-Rodermund, 2013. "Balanced skills among nascent entrepreneurs," Small Business Economics, Springer, vol. 41(1), pages 93-114, June.
    2. Erik Hurst & Benjamin Wild Pugsley, 2011. "What Do Small Businesses Do?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 42(2 (Fall)), pages 73-142.
    3. Peter Vogel, 2017. "From Venture Idea to Venture Opportunity," Entrepreneurship Theory and Practice, , vol. 41(6), pages 943-971, November.
    4. Lisa K. Gundry & Laurel F. Ofstein & Javier Monllor, 2016. "Entrepreneurial Team Creativity: Driving Innovation from Ideation to Implementation," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 24(01), pages 55-77, March.
    5. Sanjay K. Arora & Yin Li & Jan Youtie & Philip Shapira, 2020. "Measuring dynamic capabilities in new ventures: exploring strategic change in US green goods manufacturing using website data," The Journal of Technology Transfer, Springer, vol. 45(5), pages 1451-1480, October.
    6. Tyzoon T. Tyebjee & Albert V. Bruno, 1984. "A Model of Venture Capitalist Investment Activity," Management Science, INFORMS, vol. 30(9), pages 1051-1066, September.
    7. Peter Johnson, 2004. "Differences in Regional Firm Formation Rates: A Decomposition Analysis," Entrepreneurship Theory and Practice, , vol. 28(5), pages 431-446, September.
    8. Berends, Hans & van Burg, Elco & Garud, Raghu, 2021. "Pivoting or persevering with venture ideas: Recalibrating temporal commitments," Journal of Business Venturing, Elsevier, vol. 36(4).
    9. Scott Shane, 2009. "Why encouraging more people to become entrepreneurs is bad public policy," Small Business Economics, Springer, vol. 33(2), pages 141-149, August.
    10. Mateja Drnovšek & Sanda Franiæ & Alenka Slavec, 2018. "Exploring antecedents of business angels’ intention to invest," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(2), pages 701-734.
    11. Zacharakis, Andrew L. & Meyer, G. Dale, 2000. "The potential of actuarial decision models: Can they improve the venture capital investment decision?," Journal of Business Venturing, Elsevier, vol. 15(4), pages 323-346, July.
    12. Moriah Meyskens & Alan Carsrud, 2013. "Nascent green-technology ventures: a study assessing the role of partnership diversity in firm success," Small Business Economics, Springer, vol. 40(3), pages 739-759, April.
    13. Friar, John H & Meyer, Marc H, 2003. "Entrepreneurship and Start-Ups in the Boston Region: Factors differentiating High-Growth Ventures from Micro-ventures," Small Business Economics, Springer, vol. 21(2), pages 145-152, September.
    14. Angela Ambrosino & Mario Cedrini & John B. Davis & Stefano Fiori & Marco Guerzoni & Massimiliano Nuccio, 2018. "What topic modeling could reveal about the evolution of economics," Journal of Economic Methodology, Taylor & Francis Journals, vol. 25(4), pages 329-348, October.
    15. Juan Pablo Diánez-González & Carmen Camelo-Ordaz, 2016. "How management team composition affects academic spin-offs’ entrepreneurial orientation: the mediating role of conflict," The Journal of Technology Transfer, Springer, vol. 41(3), pages 530-557, June.
    16. Christian Sandström & Karl Wennberg & Martin W. Wallin & Yulia Zherlygina, 2018. "Public policy for academic entrepreneurship initiatives: a review and critical discussion," The Journal of Technology Transfer, Springer, vol. 43(5), pages 1232-1256, October.
    17. Poh Wong & Yuen Ho & Erkko Autio, 2005. "Entrepreneurship, Innovation and Economic Growth: Evidence from GEM data," Small Business Economics, Springer, vol. 24(3), pages 335-350, January.
    18. Dorian Proksch & Wiebke Stranz & Nino Röhr & Cornelia Ernst & Andreas Pinkwart & Michael Schefczyk, 2017. "Value-adding activities of venture capital companies: a content analysis of investor’s original documents in Germany," Venture Capital, Taylor & Francis Journals, vol. 19(3), pages 129-146, July.
    19. Mair, Johanna & Noboa, Ernesto, 2003. "Social entrepreneurship: How intentions to create a social enterprise get formed," IESE Research Papers D/521, IESE Business School.
    20. Roure, Juan B. & Keeley, Robert H., 1990. "Predictors of success in new technology based ventures," Journal of Business Venturing, Elsevier, vol. 5(4), pages 201-220, July.
    21. Joan-Lluis Capelleras & Francis J. Greene, 2008. "The determinants and growth implications of venture creation speed," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 20(4), pages 317-343, July.
    22. Einar Rasmussen & Roger Sørheim, 2012. "Obtaining early-stage financing for technology entrepreneurship: reassessing the demand-side perspective," Venture Capital, Taylor & Francis Journals, vol. 14(2-3), pages 77-89, February.
    23. Fiona Wilson & James Post, 2013. "Business models for people, planet (& profits): exploring the phenomena of social business, a market-based approach to social value creation," Small Business Economics, Springer, vol. 40(3), pages 715-737, April.
    24. Tommaso Minola & Silvio Vismara & Davide Hahn, 2017. "Screening model for the support of governmental venture capital," The Journal of Technology Transfer, Springer, vol. 42(1), pages 59-77, February.
    25. Heiko Bergmann, 2017. "The formation of opportunity beliefs among university entrepreneurs: an empirical study of research- and non-research-driven venture ideas," The Journal of Technology Transfer, Springer, vol. 42(1), pages 116-140, February.
    26. Kevin C. Cox & Jason Lortie & Kimberly Gramm, 2017. "The investment paradox: why attractive new ventures exhibit relatively poor investment potential," Venture Capital, Taylor & Francis Journals, vol. 19(3), pages 163-181, July.
    27. László Szerb & Esteban Lafuente & Krisztina Horváth & Balázs Páger, 2019. "The relevance of quantity and quality entrepreneurship for regional performance: the moderating role of the entrepreneurial ecosystem," Regional Studies, Taylor & Francis Journals, vol. 53(9), pages 1308-1320, September.
    28. Dahlqvist, Jonas & Wiklund, Johan, 2012. "Measuring the market newness of new ventures," Journal of Business Venturing, Elsevier, vol. 27(2), pages 185-196.
    29. Einar Rasmussen & Mike Wright, 2015. "How can universities facilitate academic spin-offs? An entrepreneurial competency perspective," The Journal of Technology Transfer, Springer, vol. 40(5), pages 782-799, October.
    30. G. Page West III, 2007. "Collective Cognition: When Entrepreneurial Teams, Not Individuals, Make Decisions," Entrepreneurship Theory and Practice, , vol. 31(1), pages 77-102, January.
    31. Carter, Nancy M. & Gartner, William B. & Reynolds, Paul D., 1996. "Exploring start-up event sequences," Journal of Business Venturing, Elsevier, vol. 11(3), pages 151-166, May.
    32. Hakyeon Lee & Pilsung Kang, 2018. "Identifying core topics in technology and innovation management studies: a topic model approach," The Journal of Technology Transfer, Springer, vol. 43(5), pages 1291-1317, October.
    33. Davidsson, Per, 2015. "Entrepreneurial opportunities and the entrepreneurship nexus: A re-conceptualization," Journal of Business Venturing, Elsevier, vol. 30(5), pages 674-695.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jessica Birkholz, 2021. "Do not judge a business idea by its cover: The relation between topics in business ideas and incorporation probability," Bremen Papers on Economics & Innovation 2109, University of Bremen, Faculty of Business Studies and Economics.
    2. Mthanti, Thanti & Ojah, Kalu, 2017. "Institutions, Human Capital and Entrepreneurial Orientation (EO): Implications for Growth Strategy," MPRA Paper 89551, University Library of Munich, Germany.
    3. Catherine Laffineur & Saulo Dubard Barbosa & Alain Fayolle & Emeran Nziali, 2017. "Active labor market programs’ effects on entrepreneurship and unemployment," Small Business Economics, Springer, vol. 49(4), pages 889-918, December.
    4. Mthanti, Thanti & Ojah, Kalu, 2017. "Entrepreneurial orientation (EO): Measurement and policy implications of entrepreneurship at the macroeconomic level," Research Policy, Elsevier, vol. 46(4), pages 724-739.
    5. Bartz, Wiebke & Winkler, Adalbert, 2016. "Flexible or fragile? The growth performance of small and young businesses during the global financial crisis — Evidence from Germany," Journal of Business Venturing, Elsevier, vol. 31(2), pages 196-215.
    6. Bergner, Sören Martin & Bräutigam, Rainer & Evers, Maria Theresia & Spengel, Christoph, 2017. "The use of SME tax incentives in the European Union," ZEW Discussion Papers 17-006, ZEW - Leibniz Centre for European Economic Research.
    7. Marco Caliendo & Alexander S. Kritikos & Claudia Stier, 2023. "The influence of start-up motivation on entrepreneurial performance," Small Business Economics, Springer, vol. 61(3), pages 869-889, October.
    8. Andrew T. Young & Matthew J. Higgins & Donald J. Lacombe & Briana Sell, 2014. "The Direct and Indirect Effects of Small Business Administration Lending on Growth: Evidence from U.S. County-Level Data," NBER Working Papers 20543, National Bureau of Economic Research, Inc.
    9. Ramoglou, Stratos & Tsang, Eric W.K., 2017. "Accepting the unknowables of entrepreneurship and overcoming philosophical obstacles to scientific progress," Journal of Business Venturing Insights, Elsevier, vol. 8(C), pages 71-77.
    10. Michael Anyadike-Danes & Carl-Magnus Bjuggren & Sandra Gottschalk & Werner Hölzl & Dan Johansson & Mika Maliranta & Anja Myrann, 2015. "An international cohort comparison of size effects on job growth," Small Business Economics, Springer, vol. 44(4), pages 821-844, April.
    11. Marc Bogdanowicz, 2015. "Digital Entrepreneurship Barriers and Drivers - The need for a specific measurement framework," JRC Research Reports JRC96465, Joint Research Centre.
    12. Per Davidsson & Jan Henrik Gruenhagen, 2021. "Fulfilling the Process Promise: A Review and Agenda for New Venture Creation Process Research," Entrepreneurship Theory and Practice, , vol. 45(5), pages 1083-1118, September.
    13. Matthew J. Higgins & Donald J. Lacombe & Briana S. Stenard & Andrew T. Young, 2021. "Evaluating the effects of Small Business Administration lending on growth," Small Business Economics, Springer, vol. 57(1), pages 23-45, June.
    14. Franziska Schlichte & Sebastian Junge & Jan Mammen, 2019. "Being at the right place at the right time: does the timing within technology waves determine new venture success?," Journal of Business Economics, Springer, vol. 89(8), pages 995-1021, December.
    15. HERMANS, Julie & VANDERSTRAETEN, Johanna & DEJARDIN, Marcus & RAMDANI, Dendi & STAM, Erik & VAN WITTELOOSTUIJN, Arjen, 2012. "Ambitious entrepreneurship: Antecedents and consequences," Working Papers 2012023, University of Antwerp, Faculty of Business and Economics.
    16. de Meza, David & Dawson, Christopher & Henley, Andrew & Arabsheibani, G. Reza, 2019. "Curb your enthusiasm: Optimistic entrepreneurs earn less," European Economic Review, Elsevier, vol. 111(C), pages 53-69.
    17. Tristan Boyer & Régis Blazy, 2014. "Born to be alive? The survival of innovative and non-innovative French micro-start-ups," Small Business Economics, Springer, vol. 42(4), pages 669-683, April.
    18. Zoltan Acs & Thomas Åstebro & David Audretsch & David T. Robinson, 2016. "Public policy to promote entrepreneurship: a call to arms," Small Business Economics, Springer, vol. 47(1), pages 35-51, June.
    19. Dienes, Christian & Schneck, Stefan & Wolter, Hans-Jürgen, 2018. "Die Auswirkungen des Gründungsgeschehens auf das regionale Wirtschaftswachstum," IfM-Materialien 270, Institut für Mittelstandsforschung (IfM) Bonn.
    20. Stefan Schneck, 2020. "Self-employment as a source of income inequality," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 10(1), pages 45-64, March.

    More about this item

    Keywords

    Business idea; Machine learning; Incorporation;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jtecht:v:48:y:2023:i:4:d:10.1007_s10961-022-09966-6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.