Portfolio Entrepreneurs Research Articles

Who become serial and portfolio entrepreneurs?

“Serial entrepreneurs” run multiple businesses in sequence while “portfolio entrepreneurs” run multiple businesses in parallel; they differ from “novice entrepreneurs” who have so far operated only one venture. The present paper is the first to model occupational choices between all three entrepreneurial types: It goes on to discuss its theoretical predictions in the light of independent evidence about serial and portfolio entrepreneurship from the extant literature.

Does Habitual Entrepreneurship Matter for Job Creation and Sustainment?

We follow the careers of habitual and novice entrepreneurs to investigate whether entrepreneurial experience matters for performance. Specifically, we compare the ability of serial, portfolio, and novice entrepreneurs to create and sustain jobs by looking at the cumulative variation in total employment across all firms held by those entrepreneurs over time. We find that portfolio entrepreneurs outperform both serial and novice entrepreneurs, displaying a greater ability to add and sustain jobs across all their firms, while serial entrepreneurs outperform novice entrepreneurs. We also find that longer periods spent away from business ownership weaken the future performance of habitual entrepreneurs.

Portfolio Entrepreneurial Processes in the Context of Individual Ventures

Ever since Macmillian’s (1986) call to study habitual entrepreneurs, much has been learned about the differences between novice and habitual entrepreneur as well as the differences between serial and portfolio entrepreneurs. This study attempts to go beyond the traditional analysis of portfolio entrepreneurs based on either firm or entrepreneur level. We try to open the black box of individual ventures launched by portfolio entrepreneurs so as to provide a street-level view of what is really happening at individual ventures. Since what, how, and why entrepreneurs do may vary significantly by individual type of ventures they launch, findings from our study, at the micro level of individual venture should contribute toward better understanding of portfolio entrepreneurial processes. In view of a very limited amount of past research done at the micro level of individual ventures, however, we rely on in-depth interviews with four successful entrepreneurs in Korea to generate findings and insights.

Passion and habitual entrepreneurship

This research note explores the differences between habitual entrepreneurs (serial and portfolio entrepreneurs) and novices in terms of their passion for entrepreneurial activities. Using the Dualistic Model of Passion as a conceptual framework, the hypotheses were tested using a random sample of entrepreneurs that registered a limited company in 2008. Results of logistic regression analyses showed that habitual entrepreneurs experience extra high passion for entrepreneurial activity. However, of the two passion dimensions proposed in the Dualistic Model of Passion – harmonious passion and obsessive passion – the obsessive component is particularly evident among habitual entrepreneurs. A closer analysis, comparing novice, serial and portfolio entrepreneurship, suggests that portfolio entrepreneurs score highest on the harmonious dimension of passion.

Credit-rationing and entrepreneurial experience: Evidence from a resource deficit context

This study explores the following novel research question: Do attributes relating to the resources and signals of lead entrepreneurs, particularly prior business ownership experience quality signals, reduce the probability that entrepreneurs will be chronic credit-rationed entrepreneurs in a developing economy context with resource deficiencies? Guided by insights from signalling, resource-based view of the firm and human capital theory, profiles of credit-rationed entrepreneurs (i.e. debt finance obtained but below the amount requested) are highlighted. The length of the debt finance gap was considered with regard to temporary (over one year), major (over two years) and chronic (over three years) finance gaps. We find support for our hypotheses relating to entrepreneurs whose firms are more innovative being more likely to be chronically credit-rationed, whilst firms with partners, entrepreneurs with longer prior business ownership experience and habitual entrepreneurs are less likely to be credit-rationed. The interaction with serial or portfolio entrepreneur reduces the chronic credit-rationing problem faced by innovative firms. A case for developing linkages between inexperienced novice entrepreneurs and habitual entrepreneurs, particularly successful portfolio entrepreneurs, is made. Notably, we suggest that building upon the experienced entrepreneurs who do exist may be particularly beneficial in resource deficit contexts such as Ghana

Exporting intensity, human capital and business ownership experience

This article examines whether human capital, particularly prior business ownership experience, is associated with the opportunity exploitation outcome relating to the intensity of exporting. A distinction is made between entrepreneurs who acquire their business ownership experience sequentially (that is, serial entrepreneurs) or concurrently (that is, portfolio entrepreneurs). Using survey data from 432 entrepreneurs in Ghana, this study explores whether human capital theory relating to prior business ownership experience is associated with superior exporting intensity. Notably, portfolio entrepreneurs reported higher exporting intensities than other entrepreneurs. The case for customized assistance to each type of entrepreneur with regard to prior business ownership experience is made.

Innovative opportunity pursuit, human capital and business ownership experience in an emerging region: evidence from Ghana

This study explores whether an entrepreneur’s ability to assemble and leverage human capital, particularly specific human capital relating to prior business ownership experience, is associated with seven types of product and work practices innovation in an emerging region, namely, Ghana. Logistic regression estimation revealed that portfolio entrepreneurs were more likely than novice entrepreneurs to report ‘innovation tried’. Multinomial logistic regression analysis revealed that portfolio entrepreneurs were more likely than other entrepreneurs to report ‘innovation tried and introduced’. If the goals of policy are to increase the ‘quality’ of new business start-ups and maximize investment returns, there is a case to target assistance to portfolio entrepreneurs.

Going Global or Selling Local? Globalization of Family Portfolio Entrepreneurs after the Financial Crisis

The purpose of this contribution is to analyse the reasons why family portfolio entrepreneurs (Westhead & Wright 1998; Carter & Ram 2003) develop international activities instead of focusing on the national market after the financial crisis. The author claims that the market orientation is a critical influence factor for the internationalization process of family businesses in general. Existing literature identifies a variety of underlying reasons for portfolio strategies, including: the search for alternative income opportunities, diversification of risk or wealth maximization (Carter & Ram 2003). In family-owned firms, family dynamics are believed to be of great effect on the development of business portfolios (Carter & Ram 2003, Sieger et al. 2009). Research has shown that key elements for portfolio entrepreneurship in family business are capital, labor, knowledge and networks (Carter & Ram 2003). With this paper the author follows the stream of research regarding the causes and processes of the internationalization of Portfolio Entrepreneurs in the family context by investigating the motives as well as the resources that are crucial for this kind of strategy.

The Growth of Business Groups by Habitual Entrepreneurs: The Role of Entrepreneurial Teams

This article reports the analysis of case studies of portfolio entrepreneurs that suggests that one of the main reasons for the formation and expansion of business groups is the need to create an entrepreneurial team, which is achieved by giving minority shares in the new ventures to others, mainly former employees. This enhances entrepreneurs‘ ability to grow and diversify the businesses under their control without compromising their ownership control of the overall business group. The article identifies and discusses the different types of entrepreneurial teams developed by portfolio entrepreneurs: joint ventures with established entrepreneurs, employee involvement, and intrapreneurship. The latter two types were specifically interesting in studying situations where there was a dominant entrepreneur and associate entrepreneurs. The article enhances the theoretical and empirical understanding of how growth is achieved in the small firms sector through business group formation, and sheds insights on how entrepreneurial team dynamics operate in multiple business contexts.

Portfolio entrepreneurs: an effectuation approach to multiple venture development

Purpose – This paper aims to investigate how effectuation and causation logic influences portfolio formation among entrepreneurs.Design/methodology/approach – The methodology used was a case study with 15 participants.Findings – There is evidence of effectuation reasoning during the preliminary and early stages of venture and portfolio development. Portfolio entrepreneurs tend to adopt causation logic as ventures and portfolios mature.Research limitations/implications – The study is exploratory and looks at cases of successful portfolio entrepreneurs only.Practical implications – The findings will allow researchers and business mentors to provide more specific advice for other entrepreneurs such as nascent and novices, and potentially reduce the incidence of business failure.Originality/value – The paper provides an understanding of how business portfolios develop from an entrepreneur's perspective.

Information Search and Opportunity Identification

This study explores whether habitual entrepreneurs with prior business ownership experience reported higher information search intensities and identified more business opportunities than novice entrepreneurs. Guided by human capital and cognitive theories, four hypotheses were tested with regard to a sample of 625 entrepreneurs in Great Britain. Habitual entrepreneurs were not found to report lower levels of information search intensity than novice entrepreneurs. Habitual entrepreneurs identified more business opportunities than novice entrepreneurs. Portfolio entrepreneurs identified more opportunities than serial and novice entrepreneurs. Respondents reporting higher entrepreneurial capability and information search intensity identified more opportunities. If the goals of policy are to increase the ‘quantity’ of new business start-ups and maximize investment returns, there is a case to target assistance to habitual entrepreneurs, particularly portfolio entrepreneurs. More customized assistance to entrepreneurs is required to improve the ‘quality’ of the entrepreneurial pool. Both novice and habitual entrepreneurs would benefit from schemes that promote more intensive information search and the leverage of entrepreneurial capabilities.

The nature of entrepreneurial experience, business failure and comparative optimism

Entrepreneurial (i.e. business ownership) experience may enable some entrepreneurs to temper their comparative optimism in subsequent ventures. The nature of entrepreneurial experience can shape how entrepreneurs adapt. Using data from a representative survey of 576 entrepreneurs in Great Britain, we find that experience with business failure was associated with entrepreneurs who are less likely to report comparative optimism. Portfolio entrepreneurs are less likely to report comparative optimism following failure; however, sequential (also known as serial) entrepreneurs who have experienced failure do not appear to adjust their comparative optimism. Conclusions and implications for entrepreneurs and stakeholders are discussed.

Portfolio Entrepreneurship: Habitual and Novice Founders, New Entry, and Mode of Organizing

With the purpose of advancing our understanding of portfolio entrepreneurship, we separate the act of entrepreneurship (new entry) from its mode or organizing (internal vs. independent organization). Analyzing a cohort of 2,253 novice and habitual business founders, we find that portfolio entrepreneurship is a common phenomenon and that the majority of portfolio entrepreneurs use the internal mode of organizing. Whether or not business founders subsequently pursue portfolio entrepreneurship is explained by their human capital (education and start–up experience) and social capital (business networks and links with government support agencies). Further, novice entrepreneurs are more likely to organize portfolio entrepreneurship within their existing firms while habitual entrepreneurs more often organize subsequent acts of portfolio entrepreneurship by creating another new independent organization. Implications for entrepreneurship research are discussed.

Entrepreneurial learning in the context of portfolio entrepreneurship

PurposePrevious research has predominantly focused on the meaning of prior entrepreneurial experience in the context of habitual entrepreneurship. To date, however, little is known about how previous experience affects the way in which several firms can be managed simultaneously. The purpose of this study is to examine entrepreneurial learning in the context of portfolio entrepreneurship and clarify how it is possible to manage several firms at the same time.Design/methodology/approachAn exploratory study using a case method was conducted (Eisenhardt; Yin) by focusing on one portfolio entrepreneur. In this study, the case can be considered as unusual thus being suitable for a single‐case study. Data were collected through interviews and the entrepreneur also provided the researchers with a written description of the development and present situation of his entrepreneurial career.FindingsThis study proposes that failures may develop entrepreneurial knowledge as well as founding experiences. Development of entrepreneurial knowledge is viewed as leading to new ways of organizing and managing start‐up firms. Learning through previous experiences has strengthened entrepreneurial knowledge and contributed to the formation of the management team (MT). Without cooperation, delegation and sharing responsibilities, successful portfolio entrepreneurship would not have been realized. However, the results suggest that learning from failure is dependent on the entrepreneur's personal background.Originality/valueThis study seeks to bring new insight to portfolio entrepreneurship by concentrating on the entrepreneurial career of a well‐known Finnish entrepreneur by following the framework of Politis. In this case, a MT in each firm enabled effective control and management of the current firm portfolio. The study shows that in addition to the entrepreneurial team, the management teams can also have a significant role in the context of portfolio entrepreneurship although they have largely been ignored.

Sources and Management Styles of Funds, and Size and Structure of Firms Portfolios: Survey from VC and PE in Mainland China

Through total coverage survey and comparative analysis on VC funds in mainland China, some evidence findings are as follows in this paper. Firstly, these facts about the average size (number) and entrepreneurs (enterprise management teams) ownership percentage of firms' portfolios of funds invested in mainland China, are consistent with theorem in the VC literature. Instead in the Western Countries, holding equity percentage by entrepreneurs is empirical very different from VC theorem. The portfolio firms' number or entrepreneurs' profit share of government-sponsored VC funds is higher than other funds in China, which is wholly consistent with theory proposition in the VC literature and the evidence in Canada. Secondly, entrepreneurs' ownership percentage is less obviously with no more than 40% equity compared with Western Countries. Meanwhile, through comparative analysis, the management teams' average age is smaller in China, but the higher level of education. Thirdly, all fund managers concern the invested industry competition. Despite China's investment managers, which also even work longer hours to invested firms, copy the methods from Western Countries in the investment technical level, however, a notable fact is: domestic investment managers in China, whether educated period or work experience, much shorter than the counterparts in the Western Countries especially USA. Finally, holding periods of firms by the funds invested in mainland China, are even shorter than in Western Countries. The ratios of seeds to whole projects by all funds are simple arithmetic average of less than 5%. All these signal: VC in the traditional classic sense being the majority of similar PE business in mainland China.

Hidden ties in international new venturing: The case of portfolio entrepreneurship

A hitherto neglected phenomenon in international new venturing is portfolio entrepreneurship, which occurs when entrepreneurs found, own, manage and control more than one business at a time, with ownership of the new venture being distinct from that of the existing business ventures. This study introduces the phenomenon of portfolio entrepreneurship in international new venturing through a longitudinal study of a cluster of small and medium enterprises (SMEs) in Tasmania, Australia, where 6 of 11 firms in the cluster were international new ventures (INVs). The pattern of international portfolio entrepreneurship pursued by the Tasmanian entrepreneurs and coupling between firms is described. Key findings include the ability of portfolio entrepreneurs to leverage high-discretion slack resources, positive legitimacy spillovers, and learning effects and experimentation across loosely coupled INVs in the portfolio. The findings also identify dysfunctional elements of portfolio entrepreneurship, and cast doubt over the conventional use of ‘the firm’ as the focal unit of analysis in INV studies. A particular contribution of this study is to remind us of the richness and pluralism inherent in international new venturing.

Independent Venture Capital, Size and Structure of Firms' Portfolio: Comparative Study from Some Cases in Mainland China

Through all coverage survey and comparative analysis on VC funds in mainland China, some evidence findings are as follows in this paper. Firstly, these facts about the average size (number) and entrepreneurs (enterprise management teams) ownership percentage of firms' portfolios of VC funds invested in mainland China, are consistent with theorem in the VC literature. The portfolio firms' number or entrepreneurs' profit share of government-sponsored VC funds is higher than other funds in China, which is wholly consistent with theory proposition in the VC literature and the evidence in Canada. Secondly, entrepreneurs' ownership percentage is less obviously with no more than 40% equity compared with Western Countries. This might be related with the majority of VC engaged in similar PE business or the later stage of firms-invested in mainland China. Finally, holding periods of firms by the funds invested in mainland China, are even shorter than in Western Countries; Meanwhile, the ratios of seeds to total projects by all funds are simple arithmetic average of less than 5%. All these signal: VC in the traditional classic sense being the majority of similar PE business in mainland China.

Decisions, Actions, and Performance: Do Novice, Serial, and Portfolio Entrepreneurs Differ?*

A conceptual framework is extended to take into account differences between inexperienced novice entrepreneurs (that is, individuals with no prior private business ownership experience) and experienced serial and portfolio entrepreneurs. Some policymakers and practitioners are considering whether resources could be more effectively utilized if they were targeted toward serial and portfolio entrepreneurs, rather than in the form of additional initiatives to increase the pool of “pure” nascent entrepreneurs and novice entrepreneurs. To inform this policy debate, similarities and differences between novice, serial, and portfolio entrepreneurs are highlighted with regard to their decisions, actions, performance, and aspirations. We detected that portfolio entrepreneurs were more likely to express dimensions of entrepreneurial behavior. A case for targeted support tailored to the aspirations and needs of novice, serial, and portfolio entrepreneurs is presented.

Novice, Serial and Portfolio Entrepreneur Behaviour and Contributions

Policy-makers and practitioners are considering whether to allocate resources towards portfolio and serial entrepreneurs, as well as the provision of additional initiatives to increase the pool of novice entrepreneurs. To inform this policy debate, univariate statistical tests were used to test for differences between 354 firms owned by novice, serial and portfolio entrepreneurs in Scotland. Also, univariate tests were conducted to compare responses made by pairwise groups of entrepreneurs. No significant differences were detected between the three types of entrepreneurs with regard to several entrepreneur and firm demographic characteristics. Additional analysis revealed that portfolio entrepreneurs have more diverse experiences, and more resources than serial or novice entrepreneurs. On average, portfolio entrepreneurs appear to offer more attractive growth prospects than other entrepreneurs.

Experience and Cognition

Some policy makers and practitioners are considering whether resources could be more effectively utilized if they were targeted towards experienced entrepreneurs (i.e. individuals with prior private business ownership experience), rather than the provision of additional initiatives to increase the pool of inexperienced novice entrepreneurs. To inform this policy debate, similarities and differences between novice, serial and portfolio entrepreneurs are highlighted with regard to their experience and cognition. A stratified random sample of independent firms located throughout Scotland was identified. In total, 200 firms (56.5%) involved novice entrepreneurs. A further 66 firms involved serial entrepreneurs (18.6%). The remaining 88 firms involved portfolio entrepreneurs (24.9%). Portfolio entrepreneurs are associated with experience and cognitive mindsets that provide greater understanding surrounding why and how they own several businesses at the same time. A case for targeted support tailored to the aspirations and needs of novice, serial and portfolio entrepreneurs is presented.