Access to investment has a significant effect on performance of new-venture but investment decisions in such new-ventures are found to be inaccurate. Mainly researchers focused on the factors that are significant in determining investment decisions but no study has explored the cause of inaccuracy in new-venture investment decisions. We have used the theories of decision making and behavioral experiments to explore the cause of such inaccuracy. We have explored the role of information signals in determining perception, then measured the deviation between perceived utility and actual investment, and lastly explored the source of such deviation. In study-1, we asked participants to appraise proposals on prospects of “risk-exposure” and “return-potential”. In study-2, participants invest in the same proposals presented in random order. We found that the role of information in determining perception of “risk-exposure” and “return-potential” is partially mutually exclusive and partially related. Though information signals help in determining the perceptions, the investment decisions do not follow the rational value of the perceived utility. Time-constraints resulted in heuristics as only few information signals were considered in determining the same level of perceptions. Further, quick decisions limit the perspective of considering an information signal. As a result, information type, respective perceptions and time-constraints are found to be significant determinants of accuracy of investment decisions.