Risk perception by entrepreneurs: 'rose-coloured glasses' and other syndromes

Entrepreneurship is characterised by individuals starting new ventures that involve both foreseen and unforeseen risks, and then attempting to cope with the risks that arise. Research into entrepreneurial risk taking has largely focused on the individual's attitude toward risk, with the presumption that entrepreneurs are more risk tolerant than others, but there is also evidence that entrepreneurs are relatively risk averse (Mullins & Forlani, 2005) or even risk preferring (Brockhaus, 1980). But the attitude toward risk is neither a necessary or sufficient condition for entrepreneurship (Douglas & Shepherd, 2000), so such diversity of empirical evidence might be expected. The relationship between risk attitude and entrepreneurship is potentially moderated by risk perception, however.