Explore or exploit? A process view on entrepreneurial decision-making in venture portfolio formation

This study explores the decision-making processes of portfolio entrepreneurs (PEs) regarding their exploration and exploitation strategies. It investigates how PEs’ expectations and eventual realizations affect their intentions and actions in forming portfolio ventures. In addition, this research highlights the dynamic nature of entrepreneurial decision-making in the context of portfolio formation to understand how intentions for portfolio formation are related to exploration and exploitation strategies. It presents evidence from in-depth interviews with 21 PEs (collectively owning 132 companies). This study classifies the structures of the venture portfolios held by the interviewed entrepreneurs into five novel categories to identify the nuanced interplay between intentionality and external influences in shaping PEs’ decisions. It introduces the concept of “emerging bounded agency” to characterize the complex nature of decision-making in portfolio entrepreneurship, challenging traditional notions of intentionality. This research advances the categorization of emerging portfolio structures and supports future research on entrepreneurial decision-making in venture portfolio development.