2. Opportunity Recognition:  Generic and Situational Phases
This process involves two phases.  The first phase involves assessing a situation to identify whether it is a potential opportunity in general terms.  The second phase involves determining whether the opportunity specifically is an opportunity for the entrepreneur or financier.

2.1 Generic Opportunity Recognition Phase:  “Is this an opportunity?”
This is the first phase of the opportunity recognition process.  During this phase, a Generic Opportunity Recognition (GOR) Template is used to screen the potential opportunity.  This Template contains “normative” cues (such as those that relate to the market, team, product/technology, etc.) and “normative” weightings for those cues in terms of an “ideal” potential opportunity.  In this regard, ideal “patterns” exist for the cues collectively at higher levels and their constituent lower level subparts.
At this level, we suggest that anyone who has significant experience in the entrepreneurial domain (whether that is as an entrepreneur, intrapreneur, business angel, venture capitalist, or banker) will have developed a fundamental opportunity pattern template.  This template will contain similar cues and “guidance” as to how to evaluate potential opportunity scenarios in terms of those cues.
Regardless of whether the person is an experienced entrepreneur or financier, their opportunity recognition templates will be similar due to the experience they have developed in the entrepreneurial domain.  As such, they will be able to recognize whether there is a potential opportunity in a given situation … for someone (though not necessarily for them).  Thus, we would expect that there would be no differences among people who is experienced in operating in an entrepreneurial context in recognizing an opportunity at a fundamental level and that, in fact, there would be universal agreement on an opportunity recognition issue.  Where we would expect differences among the decision makers is beginning with the second phase of the Opportunity Recognition Process:  the Situational Opportunity Recognition Phase.

2.2 Situational Opportunity Recognition Phase:  “Is this an opportunity for me/us?”
This is the second phase of the opportunity recognition process.  During this Phase, the previously identified “generic” opportunity is evaluated in terms of how well it “fits” the entrepreneur or financier team’s personal and/or business related criteria.  In this regard, a Situational Opportunity Recognition (SOR) Template is used to screen the opportunity.
We speculate that, during the SOR Phase, the “fit” of the identified opportunity is determined in terms of individual and team items such as the following:  prejudices; preferences; objectives (for example, lifestyle); skills, knowhow, experience levels; risk preferences; and timing implications.  As such, there will be divergence among the various groups of decision makers (and within groups) as to whether an identified potential (generic) opportunity is an opportunity for them.

3. Opportunity Evaluation:  Due diligence and funds commitment
Where there appears to be a “good” fit, the decision will be made to proceed to the Opportunity Evaluation Phase.  This will involve collecting information on the potential opportunity to verify the “claims” made in relation to the potential opportunity situation.  This is sometimes referred to as “due diligence.” It involves attempting to quantify the intuition or gut feel.  The Opportunity Evaluation Phase also will involve a decision as to whether the entrepreneur or financier will commit their funds if there is a positive due diligence outcome. For example, an entrepreneur or financier may decide not to commit funding to an opportunity even though the due diligence outcome was positive because they may obtain a better return on a competing opportunity for a given risk level.