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Using repertory grid to identify intangibles in business plans

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  • Enrique Díaz De Leó
  • Paul Guild

Abstract

The assessment of intangibles in business plans by investors is an important factor of recent interest, particularly in the evaluation of early-stage technology-based ventures. On one hand, investors are challenged to properly assess new opportunities. At the same time, entrepreneurs or innovators face the formidable task of communicating what is, sometimes, nothing more than just an 'extraordinary' idea. In such situations, the decision to continue with the due diligence process, and finally to invest, is based frequently on those aspects that are intangible. In an attempt to reveal some of the intangibles assessed by investors and communicated by entrepreneurs, an investigation was conducted using repertory grid, a technique based on personal construct psychology. Five venture capitalists and five entrepreneurs were interviewed. Evidence was found for the importance of intangibles during the investment-decision process of early stage technology-based ventures. For these ventures, the consideration of only tangible criteria is not a guaranteed predictor of success. The repertory grid technique makes a significant contribution to the identification of intangibles assessed by investors and communicated by entrepreneurs.

Suggested Citation

  • Enrique Díaz De Leó & Paul Guild, 2003. "Using repertory grid to identify intangibles in business plans," Venture Capital, Taylor & Francis Journals, vol. 5(2), pages 135-160, April.
    • Handle: RePEc:taf:veecee:v:5:y:2003:i:2:p:135-160
    DOI: 10.1080/1369106032000097030
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    Citations

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    Cited by:

    1. Nikolaus Franke & Marc Gruber & Dietmar Harhoff & Joachim Henkel, 2008. "Venture Capitalists’ Evaluations of Start–Up Teams: Trade–Offs, Knock–Out Criteria, and the Impact of VC Experience," Entrepreneurship Theory and Practice, , vol. 32(3), pages 459-483, May.
    2. Johansson Jeaneth M. & Malmstrom Malin, 2013. "The Business Model Transparency Paradox in Innovative Growth Ventures: Trade-offs between Competitive Advantages and Agency Costs," Entrepreneurship Research Journal, De Gruyter, vol. 3(2), pages 238-263, January.
    3. Johansson, Jeaneth & Malmström, Malin & Lahti, Tom & Wincent, Joakim, 2021. "Oh, it’s complex to see women here, isn’t it and this seems to take all my attention! A repertory grid approach to capture venture capitalists cognitive structures when evaluating women entrepreneurs," Journal of Business Venturing Insights, Elsevier, vol. 15(C).
    4. Andrew Atherton, 2006. "Should Government be Stimulating Start-ups? An Assessment of the Scope for Public Intervention in New Venture Formation," Environment and Planning C, , vol. 24(1), pages 21-36, February.
    5. Malin Malmström & Jeaneth Johansson & Joakim Wincent, 2015. "Cognitive Constructions of Low–Profit and High–Profit Business Models: A Repertory Grid Study of Serial Entrepreneurs," Entrepreneurship Theory and Practice, , vol. 39(5), pages 1083-1109, September.
    6. Darek Klonowski, 2005. "The Evolution of the Venture Capital Industry in Transition Economies: The Case of Poland," Post-Communist Economies, Taylor & Francis Journals, vol. 17(3), pages 331-348.
    7. Voitkane, Aija & Johansson, Jeaneth & Malmström, Malin & Wincent, Joakim, 2019. "How much does the “same-gender effect” matter in VCs' assessments of entrepreneurs?," Journal of Business Venturing Insights, Elsevier, vol. 12(C).

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