The classic entrepreneur creates a company that, in his opinion, has every prospect of becoming successful and providing him with a stable inflow of capital in the long term. Often the direction of the company is related to the personal hobbies of the entrepreneur, so it is expected that he will develop and support its activities as much as possible.
Another approach is taken by serial entrepreneurs. For them, the main goal is to sell the company at the peak of its profitability. In theory, this is a very sound idea, because this approach provides very significant benefits: it helps to avoid risks from further ownership of the business and frees up capital for new investments.
Venture capitalists are much more willing to invest in serial entrepreneurship due to the greater experience of businessmen who may have a dozen companies under their belts. Of course, not all of these startups will necessarily be successful and reach the intended selling point. However, the chances of this are much higher than those of a novice entrepreneur with one, even if unique, idea.
There is no standard number of businesses someone needs to start to be considered a serial entrepreneur, but there should probably be a minimum of three.
What are the disadvantages of such an approach? First, if you build and sell a startup that goes on to become a big success, you could be missing out on your chance to get rich by cashing out too early.
Another risk is that shortly after starting a business, a serial entrepreneur may be distracted by the idea of a new, next startup. This can lead to the entrepreneur not being able to give due attention to the first business, so that in the end it will fail.
While serial entrepreneurship can indeed be the key to great capital, it is not for everyone. And it’s not so much about experience, because any experience is only a matter of time, but that it’s more like a game, and not doing what you really like. Not everyone wants to jump from one business to another just because of the opportunity to earn more. Loving your company and the product it produces is why classic entrepreneurs stay true to one business for life.
Another thing is that the first business is rarely successful. At least not enough to think about anything else. Often, it takes only the third or fourth attempt to launch a truly profitable company, with which you remain at the helm until old age. And sometimes interests just change during life, and you move into another field of activity.
Technically, obviously, that makes you a serial entrepreneur, too, but not in the usual sense. However, expanding your brand and creating new directions under your trademark can be just that.