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Table 1
Factors, Levels and Definitions

Factors Levels Definition
Timing of Pioneer enters a new industry first
Entry Late Follower enters an industry late in the industry’s stage of development
Key Success Factor High requirements necessary for success will not change radically during industry development
Stability Low requirements necessary for success will change radically during industry development
Educational Capability High considerable resources and skills available to overcome market ignorance through education
  Low few resources or skills available to overcome market ignorance through education
Lead Time Long an extended period of monopoly for the first entrant prior to competitors entering the industry
  Short a minimal period of monopoly for the first entrant prior to competitors entering this industry
Competitive Rivalry High intense competition among industry members during industry development
  Low little competition among industry members during industry development
Entry Wedge Mimicry High considerable imitation of the mechanisms used by other firms to enter this, or any other industry, e.g., a franchisee
  Low minimal imitation of the mechanisms used by other firms to enter this, or any other industry, e.g., introducing a new product
Scope Broad a firm that spreads its resources across a wide spectrum of the market, e.g., many segments of the market
  Narrow a firm that concentrates on intensively exploiting a small segment of the market, e.g., targeting a niche
Industry Related High venturer has considerable experience and knowledge with the industry being entered on a related industry
Competence Low venturer has minimal experience and knowledge with the industry being entered or related industry

At the individual level of analysis, attributes most often used by venture capitalists in their assessment of new venture survival were industry related competence, educational capability, competitive rivalry and timing. Industry related competence was significant for 84.4% of venture capitalists, followed by educational capability with 48.4%, competitive rivalry with 43.8% and timing with 37.5%. Key success factor stability, lead time, mimicry and scope were significant with 26.6%, 25.0%, 18.8% and 17.9% of venture capitalists, respectively. Timing's interaction with lead time were significant for just over 17% of venture capitalists. Timing's interaction with other factors was significant less often. Timing's interaction with both educational capability and competitive rivalry were significant for 10.9% of venture capitalists while timing's interaction with both key success factor stability and mimicry were significant for 7.8% of respondents. Timing's interactions with scope was only significant for 6.3% of venture capitalists.

At the aggregate level of analysis, the Z scores indicate that: industry related competence, competitive rivalry, educational capability, key success factor stability, lead time, timing, timing-educational capability interaction, key success factor stability-timing interaction and lead time-timing interaction are significant in venture capitalists' assessment of profitability, i.e., their Z scores exceed 1.645. The mean regression coefficient for each significant main effect was negative which indicates the variable level venture capitalists associate with higher profitability is high industry related competence, low competitive rivalry, high educational capability, high key success factor stability, long lead time and pioneering.

To interpret the form of the significant interactions, each individual's timing- educational capability interaction, key success factor stability- timing interaction and lead time- timing interaction means were averaged. The form of the interaction for key success factor stability-timing interaction is Mean high pioneer > Mean low late & Mean low pioneer > Mean high late. For educational capability-timing interaction: Mean high pioneer > Mean high late > Mean low pioneer > Mean low late and lead time-timing interaction: Mean long pioneer > Mean short pioneer > Mean long late > Mean short late.
On average, the most importance criteria for venture capitalists in their assessment of profitability is industry related competence (w2 = .20), second tier of importance is competitive rivalry (w2 = .09), timing (w2 = .09) and educational capability (w2 = .08). The third tier of importance is lead time (w2 = .02), mimicry, scope and timing-lead time interaction (each with w2 = .01). Other interactions are less important.

Table 2 displays the results in terms of this study's hypotheses. Reports of reliability and explanatory and predictive ability of the models follow.

Eighty eight percent of the individual models of venture capitalists' profitability assessment policies explained a significant amount of the variance. The mean R2 was .77. The mean reliability of responses was .62. Sixty four percent of individual models had significant predictive ability and a mean R2 of .77. The aggregate model was able to significantly predict the decisions of 48% of the venture capitalists with a mean R2 of.67.

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