Environmental jolts prompt organizational learning processes as decision makers reexamine engrained routines and processes, yet there is little scholarly attention on this issue. Building on both the jolt and organizational learning literatures, we use the dot-com crash as an opportunity to test and extend the notion of vicarious learning from failure. The purpose of our research is to investigate how investment in new business opportunities varies in periods of “irrational exuberance” relative to periods of “cautious investment”. We comparatively examine two different ways firms can pursue new business opportunities that reside outside of the boundaries of the firm: corporate venture capital (CVC) investments and the acquisition of entrepreneurial ventures. We hypothesize that the dot-com jolt altered firms’ new business investment decisions, and then consider three contingencies based on key attributes of the firm and the investment target: managerial optimism, R&D intensity, and the age of the venture.