Is beauty in the eye of the beholder? An empirical study of how entrepreneurs, managers, and investors evaluate business opportunities at the earliest stages

Existing research suggests that individuals occupying different professional roles, have different human capital and hence vary in their "opportunity templates", and may thus deviate in their evaluations of a given business opportunity. This paper advances our understanding on how evaluators vary in their assessments of business opportunities in two very early phases by conducting a comparative analysis of three stakeholder groups that are crucial to new ventures: entrepreneurs, managers, and investors. We analyze a unique dataset of 693 business ideas and 379 business-plan proposals submitted to a nationwide startup competition held in Switzerland. Our linguistic analysis reveals heterogeneity in opportunity evaluations between groups with different types of professional roles. However, this divergence in individuals' evaluations does not emerge at the earlier business-idea phase, but only at the later business-plan stage. The study provides empirical evidence that individuals' professional role makes them more sensitive to certain aspects of a given business-plan proposal.