What is a Serial Entrepreneur?

Key Takeaways:

• Serial entrepreneurs are people who have founded multiple businesses consecutively.
  
• These individuals usually have a track record of setting up successful enterprises.
  
• Venture capital is one of the most common forms of alternative investing.
  

Elon Musk, Steve Jobs, Oprah Winfrey, and Richard Branson. What do these individuals have in common? They are examples of serial entrepreneurs, people who have started multiple businesses. Whether or not the businesses are run simultaneously, serial entrepreneurs are typically well-versed at spotting new opportunities and setting up new companies.

In addition to establishing their own companies, serial entrepreneurs frequently invest or get involved in other startups they find attractive. This article explores serial entrepreneurship, including how to become one, and the importance of alternative investing.

What is a Serial Entrepreneur?

Rather than starting one enterprise and remaining focused on it for many years, serial entrepreneurs start one business after another. While it is relatively common for individuals to begin a business, experience failure, and try again with another venture, serial entrepreneurs are on a different level.

While not all their businesses must be successful for them to earn the appellation, individuals known as serial entrepreneurs have to their credit at least a couple of major and lasting successes.

There is no consensus as to how many enterprises an individual must start to be considered a serial entrepreneur, though there is often considered the minimum number. These entrepreneurs might sell or step back from one company before beginning another, while others might run multiple businesses at the same time, delegating others to manage them.

How Do People Become Serial Entrepreneurs?

As noted, serial entrepreneurs are a breed apart. A person who succeeds with multiple businesses is remarkable, considering one in five businesses typically fail. As a group, serial entrepreneurs tend to be more enthusiastic during a company’s early stage. They get excited about things like team building, product conceptualization, and luring investors.

These people are usually problem solvers and adventurous risk takers. They excel at time management and goal setting and have a thorough understanding of their markets. They also seemingly have a never-ending list of new ideas, often for disparate industries, and tend to connect their work to broader purposes. Such entrepreneurs are usually optimistic and quickly adapt to marketplace changes.

While not everyone is cut out to be a serial entrepreneur, here are some steps to take to become one:

• Select an industry. Ideally, one should pick a field about which they are knowledgeable.
• Gauge an idea. While some serial entrepreneurs recommend conducting extensive market research, others suggest running the concept by family, friends, and those who might be in their target market first. The main idea is to determine whether there is a need for the items or services being considered.
• Get going. Not all businesses require a big initial investment. In fact, it is not unusual for some serial entrepreneurs to start out with just a laptop and a network of people who can help. These early stages will be marked by trial and error.
• Delegate. It is important to understand the value of delegating and constructing a formidable support group.
• Get a financial advisor. Beginning just one business is often a complicated and unpredictable process. Professional financial assistance is recommended.
• Keep track of expenses. It is critical for budding entrepreneurs to pay close attention to how much they are spending, as such costs can quickly add up.

Examples of Serial Entrepreneurs

People numbered among the most prominent serial entrepreneurs are:

• Elon Musk. The new owner of Twitter has made his mark on the electric vehicle space, space travel, and online payments industries. After selling his first business, Zip2, for $307 million 24 years ago, Musk helped establish Tesla, PayPal, SolarCity, SpaceX, and the Boring Company.
• Oprah Winfrey. Largely known for her eponymous talk show, Winfrey has parlayed her celebrity into a number of successful ventures. With her production company, Harpo, Inc., Winfrey’s studio was the first major one to be run by an African American. She has also founded a radio channel, a magazine, a TV network and co-produced a Broadway musical.
• Sir Richard Branson. The owner of some 40 companies to date, he founded Virgin Records, which he eventually sold for $1 billion. Branson has also built a mobile network, an airline, and a rail franchise. His success is such that Queen Elizabeth knighted him.
• Steve Jobs. The co-founder of Apple went on to found NeXT Computers and was one of the co-founders of Pixar. Jobs returned to Apple in 1997, then proceeded to transform the smartphone industry.

The Workload of Serial Entrepreneurs

Serial entrepreneurs often have their hands in multiple businesses simultaneously. Playing an active role in all their companies requires a reliance upon a strong leadership team that is trustworthy and accountable.

However, even if they have delegated management to others, these entrepreneurs must still check in on their enterprises on a regular basis to ensure there are no glitches. In addition, there will likely be quarterly meetings with shareholders to go over the previous quarter’s results and make certain the business is on track for short- and long-term goals.

The Benefits and Drawbacks of Serial Entrepreneurship

There are upsides and risks associated with being a serial entrepreneur.

On the positive side, these individuals generally enjoy creative freedom and collaborate with individuals from all walks of life. They also have the potential to make a lot of money, given the number of businesses launched.

A risk is that the serial entrepreneur will start a business and then soon after is distracted by an idea for a new one. Consequently, they might not pay sufficient attention to the first business, causing it to fail.

Another risk is cashing out too soon and missing the chance to achieve enormous wealth. There is always the chance an entrepreneur will sell a startup that becomes massively successful.

How Can One Invest in the Startups of Serial Entrepreneurs?

While investing in startups can generate wealth, there are major risks involved. After all, the vast majority of startups fail. On the other hand, it no longer necessarily takes wealth and great connections to invest in new ventures. For example, there are startup investing platforms that offer curated opportunities and require minimum buy-ins.

Note that there may be a maximum amount one can invest in a crowdfunding venture during a 12-month period, as per the U.S. Securities and Exchange Commission. Those whose annual earnings or net worth is less than $107,000 may only invest up to $2,200 in such ventures. Investors with net incomes of more than $107,000 may invest no more than $107,000.

Ultimately, the various startups serial entrepreneurs create can be invested in through venture capital, one of the most common alternative investments.

Venture Investing and Alternatives

About one-third of self-employed people are serial entrepreneurs. While not all of them will have wholly successful track records, their experiences and proven diligence tend to make serial entrepreneurs attractive to venture investors.

Alternative Investing and Portfolio Diversification

Increasingly, investors want a portfolio mix that is not entirely dependent on the stock market. Many are now drawn to alternative investment platforms such as Yieldstreet, which creates consistent secondary income streams across a variety of asset classes.

The goal is to generate predictable income outside of traditional public markets, which can be volatile. Alternative investments can be a good way to help accomplish this. Traditional portfolio asset allocation envisages a 60% public stock and 40% fixed income allocation. However, a more balanced 60/20/20 or 50/30/20 split, incorporating alternative assets, may make a portfolio less sensitive to public market short-term swings.

Real estate, private equity, venture capital, digital assets, precious metals and collectibles are among the asset classes deemed “alternative investments.” Broadly speaking, such investments tend to be less connected to public equity, and thus offer potential for diversification. Of course, like traditional investments, it is important to remember that alternatives also entail a degree of risk.

In some cases, this risk can be greater than that of traditional investments.

This is why these asset classes were traditionally accessible only to an exclusive base of wealthy individuals and institutional investors buying in at very high minimums — often between $500,000 and $1 million. These people were considered to be more capable of weathering losses of that magnitude, should the investments underperform.

However, Yieldstreet has opened a number of carefully curated alternative investment strategies to all investors. While the risk is still there, the company offers help in capitalizing on areas such as real estate, legal finance, art finance and structured notes — as well as a wide range of other unique alternative investments.

Learn more about the ways Yieldstreet can help diversify and grow portfolios.

In Summary

A prime example of alternative investments, venture capital can be used to create or grow wealth through startup businesses created by serial entrepreneurs. After all, it is important for investors to have diversified portfolios to protect against market volatility. To that end, Yieldstreet has alternative investment opportunities that can help.

All securities involve risk and may result in significant losses. Alternative investments involve specific risks that may be greater than those associated with traditional investments; are not suitable for all clients; and intended for experienced and sophisticated investors who meet specific suitability requirements and are willing to bear the high economic risks of the investment. Investments of this type may engage in speculative investment practices; carry additional risk of loss, including the possibility of partial or total loss of invested capital, due to the nature and volatility of the underlying investments; and are generally considered to be illiquid due to restrictive repurchase procedures. These investments may also involve different regulatory and reporting requirements, complex tax structures, and delays in distributing important tax information.