To better understand opportunity creation, we investigate the extent to which recognition of failure impacts the new transaction commitment mindset of entrepreneurs. In a PLS model, we utilize data gathered from a sample of 220 entrepreneurs, and augment these results with an ANOVA analysis that provides a deeper exploration of the theory. In this article, we: (1) elaborate on the critical dimensions that represent a multi‐construct view of the new transaction commitment mindset and describe ways that these dimensions can be measured; (2) examine the extent to which the recognition of new venture failure impacts the new transaction commitment mindset; and (3) explore the implications of the interaction between failure recognition and the new transaction commitment mindset for an entrepreneur's decision to continue or abandon opportunity creation efforts. Our results suggest that recognition of failure does indeed impact the new transaction commitment mindset and, by extension, can enable opportunity creation. Copyright © 2008 Strategic Management Society.