The Entrepreneurial Value Creation Theory

Abstract

The Entrepreneurial Value Creation Theory explains the entrepreneurial value creation and its realization via a venture (see figure 10.1). The entrepreneurial value creation process consists of two iterative stages, the venture formulation (Stage 1) and the venture monetization (Stage 2). In Stage 1, the entrepreneur begins with either the entrepreneurial opportunity or the entrepreneurial intention to found a new venture to realize the entrepreneurial reward. In Stage 1, the entrepreneurial competence is formulated, the process of which is explained by the Theory of Entrepreneurial Competence (see chapter 5). Many ventures fail during Stage 1. If a venture transitions to Stage 2, further investments are required to build dynamic complementary capabilities, which are then embedded in the business model design. If the venture is unable to procure further investments, the venture returns to Stage 1 and the entrepreneurial competence is reformulated, before the venture may return to Stage 2. In Stage 2, the Business Model Theory, within the Entrepreneurial Value Creation Theory, explains the elements of the business model design, the venture value drivers.