We examine how the temporal distinctiveness of new venture business concepts influences entrepreneurs’ ability to attract initial funding. We conceptualize temporal distinctiveness as a balance between a business concept’s novelty relative to past ventures and its potential impact on the future venture business concepts. Building on the socio-cognitive underpinnings of optimal distinctiveness theory, we hypothesize an inverted U-shaped relationship between a venture business concept’s temporal distinctiveness and the amount of initial funding raised. Using a novel text-based measure applied to a large dataset of venture business concepts, we find an inverted U-shaped relationship between temporal distinctiveness and initial funding raised. Additional analyses employing a validation dataset of AI innovations supports the generalizability of the measure and theory. Altogether, these findings suggest that investors expect novel venture business concepts to generate future impact, which reduces perceived risk and increases the attractiveness of these ventures for funding.
