Failure has been consistently extolled as a fundamental learning experience in entrepreneurship. However, researchers acknowledge that this pervasive view of failure is supported in the literature almost solely on the basis of anecdotal evidence. This study empirically investigates the type of knowledge that can be learned through failure experience as well as the factors that moderate the learning process. We find that business failure can result in heightened usage of structural alignment processes, particularly for those entrepreneurs operating with an intuitive cognitive style, utilizing expert opportunity prototypes, with low levels of mentoring experience.