The field of entrepreneurship, especially in teaching (Honig, 2004), has strongly emphasized the importance of business planning, despite limited empirical evidence for its usefulness with respect to new venture performance (Gruber, 2007). Apart from the performance perspective, one can look at business planning as a gate-keeper for nascent entrepreneurs. Writing a business plan can trigger nascent entrepreneurs to fundamentally reconsider their intentions. We hypothesize that business planning reduces entrepreneurial activity, by (i) ensuring rationality in planning a new venture, (ii) acting as a self-selection mechanism for unsuitable or less than serious entrepreneurs, and (iii) constituting a signal of emerging entrepreneurial activity provoking external pressures against founding.