Despite the practical reality that venture investors often “miss” successful investment opportunities, prior research has yet to account for the plausible hypothesis that such misses may exert powerful influences on future decisions. Grounded in cognitive science, we develop and test hypotheses regarding the influence of past misses on future investment decisions by conducting an experiment using a sample of 121 angel investors. Results reveal that missed opportunities notably decrease their likelihood of investing in future ventures in the same space. Moreover, we demonstrate the conditions under which this missed opportunity effect is most acute: high environmental dynamism and low investment experience. Our primary contribution to the literature is documenting that missed opportunities have profound effects on the investment decisions that follow, highlighting the need for a re-examination of conventional wisdom that overlooks interdependence between current decisions and forgone opportunities of the past.
