Desirability of New Venture Formation(Aspects of a situation that make it desirable to start a new company)The perception that starting a new company is desirable results from an individual’s culture,subculture, family, teachers and peers.American culture places a high value on being your own boss, being a success and makingmoney therefore, it is not surprising to find a high rate of company formation in the UnitedStates. On the other hand in some countries making money is not as valued and failure may bea disgrace. The rate of business formation in these countries is not as high. Many subculturesthat shape value systems operate within a cultural framework.Studies indicate that a high percentage of founders of companies had fathers and/or motherswho valued independence. Encouragement to form a company is also gained from teachers,who can significantly influence individuals. An area having a strong educational base is also arequirement for entrepreneurial activity. Peers are important, also, as is an area with anentrepreneurial pool and peer-meeting place.Possibility of New Venture Formation(Factors making it possible to create a new venture)Although the desire of new venture formation derived from the individual’s culture,subculture, family, teachers and peers needs to be present before any action is taken, thesecond feature necessary centers around this question “What makes it possible to form anew company?”Formal education and previous business experience give a potential entrepreneur the skillsneeded to form and manage a new enterprise. Although educational systems are important inproviding the needed business knowledge, individual will tend to be more successful informing in fields in which they have worked. The government also contributes by providing theinfrastructure to help a new venture.The market must be large enough and the entrepreneur must have the marketing know-how toput together the entire package.Finally, financial resources must be readily available. Although most start-up money comesfrom personal savings, credit, and friends, but there is often a need for additional capital. Riskcapital availability plays an essential role in the development and growth of entrepreneurialactivity.