What Is a Serial Entrepreneur?

A serial entrepreneur is someone who starts or buys a business, leaves it through a sale, closure or handover, and then starts or buys another. Researchers distinguish serial entrepreneurs from portfolio entrepreneurs, who own several businesses at the same time. Studies suggest prior experience, especially a previous success, improves the odds for the next venture.

Most of what founders read is written for the first business. But many of the people I interview are on their second, third or fourth. Their questions are different. They know how to launch; what they wonder is whether their experience is an advantage or a trap, when to start again, and what to do differently. This page covers what the research says and how the route on this site changes for a repeat founder.

Serial, portfolio and habitual: the terms

Academic research on repeat founders uses a few precise terms. A review by Deniz Ucbasaran, Gry Agnete Alsos, Paul Westhead and Mike Wright, published in 2008, sets them out:

Term	Meaning
Novice entrepreneur	Has never owned a business before
Habitual entrepreneur	Has owned at least one business before (the umbrella term)
Serial entrepreneur	A habitual entrepreneur who exits one business before starting or buying the next
Portfolio entrepreneur	A habitual entrepreneur who owns several businesses at the same time

The review argues that these groups differ enough that researchers and policymakers should treat them separately. In everyday language, people call anyone who has started more than one company a serial entrepreneur. On this site we keep the distinction, because the two paths are different. Running several businesses at once is covered in How to Manage Multiple Businesses.

How common are repeat founders?

It depends on where you look. In venture-backed startups, repeat founders are a familiar sight. In small business, they are less common than people assume.

Francine Lafontaine and Kathryn Shaw studied every business selling taxable goods or services started in Texas between 1990 and 2011, close to 2.3 million retail businesses opened by small owners. Only 25% were started by someone who had started at least one business before. Only 8% were started by someone who was still running another business they had started earlier. Once a person had started a second business, though, the chance of starting a third and a fourth kept rising. Starting again seems to become a habit.

Does experience help?

This is the central question, and the evidence is encouraging but more nuanced than the success stories suggest.

Evidence from venture-backed founders

Paul Gompers, Anna Kovner, Josh Lerner and David Scharfstein studied founders of companies backed by venture capital, published as “Performance Persistence in Entrepreneurship” in the Journal of Financial Economics in 2010. They defined success as starting a company that went public. Their findings, as summarized on the Harvard Law School Forum on Corporate Governance:

Founder’s track record	Chance the next venture succeeds
Previous venture succeeded	30%
Previous venture failed	20%
First-time founder	18%

Two points stand out. First, previous success matters a lot. Second, previous failure helps very little compared with having no experience at all. The authors read this as evidence that skill plays a real role in entrepreneurship, not just luck. Part of that skill, they suggest, is timing: founders who started in the right market at the right moment tended to do it again, and the authors argue that choosing a good time and place is itself a skill.

They also found that experienced venture capital firms improved the odds mainly for founders without a successful track record.

Evidence from small businesses

The Texas study by Lafontaine and Shaw asked a different question: does experience help a small retail business survive? Their answer was yes. Prior startup experience extended the life of the next business, even after accounting for stable differences between individuals. Experience in the same sector helped most, experience in other retail sectors helped less, and in restaurants outside experience did not help. The authors concluded that founders build general skills by doing, which supports the idea that entrepreneurship can be learned.

What the evidence does not say

Neither study says that a second business is likely to succeed. Even founders with a previous success had well under even odds of a second public company in the venture capital data. And a failure on its own is not the training people sometimes claim it is. In the interviews I do, the founders who learn most from a failure are the ones who can say specifically what went wrong and what they would change. The lesson has to be extracted; it does not arrive automatically.

Documented examples

Two well documented cases show the pattern.

Evan Williams cofounded Pyra Labs in 1999, where Blogger was developed. Google bought Blogger in 2003. He then cofounded the podcasting company Odeo in 2004, cofounded Twitter, which launched in 2006, and founded Medium in 2012.

Elon Musk founded Zip2 in 1995, which Compaq bought in 1999 for $307 million. He then founded X.com in 1999, the company that later became PayPal, which eBay bought in 2002 for $1.5 billion. In 2002 he also founded SpaceX. (He was an early funder of Tesla rather than one of its founders.)

These are exceptional stories, not typical ones. The research above is a better guide to what a normal repeat founder can expect.

How the route changes the second time

Every milestone still applies, but a repeat founder experiences them differently.

Decide

At Why Start a Business?, the question becomes why start another one. The honest answers vary: the last one was sold and the founder is restless, the last one failed and they want to prove something, or they simply like the early stage more than running a mature business. Each answer leads to different choices.

At How to Come Up With a Business Idea, repeat founders have an advantage the Texas study points to: knowledge of a sector. Staying close to a market you know tends to help. The trap is assuming the next idea will work just because you are the one doing it.

Launch

Validation is usually faster, because a repeat founder has a network, an audience or past customers to ask. That makes it tempting to skip validation entirely. The founders I hear regret this are often those who succeeded once and then built the second product on confidence instead of evidence. The steps in How to Validate a Business Idea still apply.

Getting customers and pricing are usually easier the second time, because founders know how to sell and are less afraid of charging properly.

Sustain

The biggest change is at the end of the route. Repeat founders tend to think about the exit from day one, because they have been through one. That shapes how they set up the company, how they keep the books, and how dependent the business is on them personally. Questions from Should You Sell Your Business? arrive much earlier.

Common mistakes of repeat founders

• Overconfidence. Skipping validation because the last business worked.
• Restarting too soon. Starting a new company before the lessons from the last one are clear, or before money and energy have recovered.
• Rebuilding the old business. Choosing a problem because it resembles the last success, not because customers need it now.
• Carrying over the wrong team. Former partners and employees can be a huge advantage, but only if the roles still fit.
• Underestimating a new sector. The Texas research suggests experience transfers best within the same field.

Topics coming next

Two future articles will go deeper on this type of founder. When to Start Your Next Business will look at timing: what founders weigh between one company and the next, and the signs that it is time. What Serial Entrepreneurs Do Differently will look at the habits that seem to carry over from one business to the next.

Where this sits on the route

This page is part of Types of Entrepreneurs. Before it comes What Is a Cofounder?, which matters here because many repeat founders choose their partners differently the second time. Next is How to Manage Multiple Businesses, for founders who would rather run several businesses at once than one after another. If you are about to exit your current business before starting again, How to Close a Business covers that step.