Our study focuses on the opportunity exploitation stage of the entrepreneurial process in new ventures operating in incubators; we propose and demonstrate that Absorptive Capacity (ACAP), the capabilities of the firm to recognize the value of new knowledge coming from external sources, to assimilate it, and to apply it to commercial ends, has a fundamental role in the opportunity- exploitation process. We show that different team characteristics affect the different ACAP stages: new ventures team diversity has a positive effect on ACAP acquisition while goal setting has a positive effect on ACAP exploitation. We propose and demonstrate that ACAP acquisition is positively related to new ventures performance, while the effect of ACAP exploitation on Performance is moderated by environmental uncertainty such that in a low uncertainty environment (high certainty) it has a negative effect on performance, whereas in high uncertainty environment ACAP exploitation has a positive effect. Moreover we were able to demonstrate that implementing flexibility strategy has a positive effect on new ventures performance.

The model was tested in Israel on a sample of 56 new ventures in 13 incubators.