The focus of this research was on exploring how entrepreneurs think about risk and deal with it in the strategy formation process. Suggests that risk taking is related to several factors: innate personality traits; learning; experience of crisis; as well as business‐related factors such as the type of venture founded and the nature of the industry environment. The analysis is supported by a number of case study examples based on field work conducted between 1994 and 1997. The adoption of a longitudinal‐processual approach, which is still rare in the literature on SMEs, suggested that the entrepreneur’s perceptions of risk, and capacity to bear risk, evolved over time. The main proposal of this exploratory study is that risk taking is not just a static personality trait forged by nature or nurture, but seems to reflect learning in a business context. Also discusses whether risk‐taking behaviour helped or hindered venture performance. The paper concludes with a brief assessment of the implications of these findings for future research and practice.
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