Digital technology has had changed the uncertain nature of the process of new venture idea generation, and it has also brought unprecedented opportunities for the generation of new digital venture ideas. To explore how startups can deal with major challenges brought by digital technology and create new digital venture ideas, this paper focuses on micro level entrepreneurial actions, and constructs a theoretical model of the relationship among networking capabilities, IT capabilities, prior knowledge and new digital venture ideas. Furthermore, through the hierarchical linear regression analysis of 278 sample data, the paper finds that in the context of digitalization, both networking capabilities and IT capabilities have a positive impact on the generation of new digital venture ideas. In addition, prior knowledge plays an moderating role in the relationship between IT capabilities and new digital venture ideas. This paper explore how startups can build new digital venture ideas in the context of digitalization, which guides small enterprises in responding to new challenges.