Falling Forward: Real Options Reasoning and Entrepreneurial Failure

@article{McGrath1999FallingFR,
  title={Falling Forward: Real Options Reasoning and Entrepreneurial Failure},
  author={Rita Gunther McGrath},
  journal={Academy of Management Review},
  year={1999},
  volume={24},
  pages={13-30}
}
Although failure in entrepreneurship is pervasive, theory often reflects an equally pervasive antifailure bias. Here, I use real options reasoning to develop a more balanced perspective on the role of entrepreneurial failure in wealth creation, which emphasizes managing uncertainty by pursuing high-variance outcomes but investing only if conditions are favorable. This can increase profit potential while containing costs. I also offer propositions that suggest how gains from entrepreneurship may… Expand
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