Abstract/Summary

Entrepreneurship is important to the development of market economies, in particular founding or ‘starting-up’ new enterprises from scratch. Researchers constantly seek to break down the heterogeneous nature of entrepreneurial behaviour and one suggestion is to focus on experienced habitual entrepreneurs who have owned and managed multiple businesses. Studies have shown that the habitual typology can be divided into more homogenous sub-types. Researchers make a distinction between serial entrepreneurs who focus sequentially on one business at a time and portfolio entrepreneurs who own and manage multiple businesses simultaneously. More is known about portfolio entrepreneurship and drawing on this work a comprehensive set of postulates is beginning to emerge to explain the differences between novice, serial and portfolio entrepreneurs. Therefore, there is an urgent need to focus on the serial entrepreneur. The principal research question is: How is one venture related to the next in the series? Crucially, serial founders possess repeated experience of entry, exit and re-entry into entrepreneurship. Exit from a venture they founded can be positive or negative, i.e. the sale of a business or a managed closure or outright failure. Serial entrepreneurs have to manage the consequences of exit and also make decisions regarding re-entry. An improved understanding of their cyclical, flow-like processes, punctuated with the ‘critical incidents’ of entry and exit is key to understanding the economic selection of entrepreneurs and the accumulation and use of entrepreneurial human capital. Researchers expect ventures to be related and follow industry corridors. This study explores the nature of corridors and goes further by asking if ventures are imitative (i.e. serial entrepreneurs are more cautious) or innovative (i.e. bring new means-ends combinations into existence). Using the commentaries of persistent and active entrepreneurs and details of their ventures, it is clear that experienced founders use particular modes when creating new businesses. Also an unsuccessful exit through closure or outright failure is normal, a common occurrence in a serial career. The study of 112 start-ups reveals that the outcome of the previous venture has a strong bearing on what happens next. Successful exits often lead to start-ups in different industries thereby spreading innovation. Failure of a novice venture leads to a return to essentially the same opportunity to try again. Persistent serial entrepreneurs can recover from unaffordable losses by returning to employment. Exit conditions are also important in understanding portfolio entrepreneurship. Novice or serial ‘singleton’ entrepreneurs transition to portfolio entrepreneurship when their current business is not exited. Unrelated ventures are almost invariably unsuccessful, and consequently attempts to transition are not always successful. Serial entrepreneurs obtain economic benefit from previous ventures through the phenomenon of serial diversification, recycling and reusing knowledge and other resources. There is evidence of learning from experience over the course of a career, as the frequency of negative outcomes falls and each venture in the series survives longer, substantially increasing its chances of a successful exit. On the basis of these findings a new theory of serial entrepreneurship is proposed for further research, and recommendations are made for policy-makers, practitioners and entrepreneurship educators.