Many scholars state that entrepreneurs use their imagination. Imagination is the creation of mental images of external objects, events or situations currently not present to the senses. Imagination can be subdivided in three distinct processes: prospective thinking, counterfactual thinking, and perspective taking. Potential entrepreneurs use their imagination, among others, to recognize or create business opportunities. However, whether or not the use of imagination leads to better business opportunities is not empirically tested. The aim of this paper is to test which imagination process leads to better business opportunities. Using an experimental setting we contribute to the discussion on business opportunities by introducing the imagination concept and its three sub processes.