What Financial Backers Expect From Business Plans: Effectual Versus Causal Logic
For years, Business Planning (BP) has played a central role in the teaching and practice of new venture creation. However, existing research has provided the authors with mixed results about its usefulness. Part of the argument against BP is that it relies on top-down logic while emerging bottom-up logic may be more relevant. Sarasvathy (2001) proposed that successful entrepreneurs tend to be effectual rather than causal. Sarasvathy & Wiltbank (2002) also suggested that Business Angels (BA) and Venture Capitalists (VC) tend to be more effectual than causal and should then pay less attention to BP.