Toward a Theory of Serial Entrepreneurship: Decomposing Entrepreneurial Experience



Does prior experience increase entrepreneurial intentions? Existing entrepreneurship studies typically assume that prior experience increases entrepreneurs’ intentions to reenter entrepreneurship because people learn from their experiences and because increased human capital leads to a greater entrepreneurial ability (Ucbasaran, Westhead, Wright, & Flores, 2009). We, however, argue that because the human capital (Becker, 1975) perspective has not sufficiently considered the variance in the quality of experience, prior experience does not necessarily increase entrepreneurial intention. It is fair to say that entrepreneurial experience has been an under-conceptualized and under-specified construct. In this study, therefore, we draw on social cognitive theory (SCT) (Bandura, 1986) and prospect theory (PT) (Kahneman & Tversky, 1979) to suggest (a) that the effect of success experience is different from that of failure experience, (b) that entrepreneurial experience has multiple dimensions, such as entrepreneurial self-efficacy (ESE) (Bandura, 1991), financial performance, and psychological ownership (Pierce, Kostova, & Dirks, 2001), associated with prior success and failure, and (c) those three dimensions would jointly determine entrepreneurs’ intentions to reenter entrepreneurship after prior entrepreneurial endeavors.
An interesting finding in our literature review is that SCT and PT develop the opposite predictions of intentions to reenter entrepreneurship. SCT, for instance, suggests that prior experience of entrepreneurial failure will decrease entrepreneurs’ belief in their ability to perform entrepreneurial activities, i.e. ESE will be reduced. This reduces their intention to reenter. The prediction of PT is quite different, however. Prior entrepreneurial failure will expose entrepreneurs to a loss condition which fosters their risk-seeking attitudes (Kahneman & Tversky, 1979). This enhances their intentions to reenter. To reconcile this conflict we propose an overarching framework and argue that performance (success or failure) of prior entrepreneurship moderates the relationship between ESE and entrepreneurs’ intentions to reenter. To test the proposed model we employ undergraduate students and entrepreneurs in several experimental studies. The preliminary results support our model.
The intended contribution is significant. First, this study highlights the difference between success and failure experience and proposes how they elicit different levels of entrepreneurs’ intention to reenter entrepreneurship after business exit. Second, this study identifies the boundaries of PT and SCT. We argue that intention to reenter entrepreneurship would be governed by PT when entrepreneurs’ post-exit ESE is low and by SCT when their post-exit ESE is high. Third, previous research on business failure suggests two consequent factors that will affect recover from failure: emotional loss and financial loss (Shepherd, Wiklund, & Haynie, 2009). We extend this line of research from business failure to business success and suggest that emotional gain and financial gain, in terms of individuals’ framing, could also predict entrepreneurial intention. Last but not least, we bring psychological ownership into our proposed model. Compared to employees in organizational settings, entrepreneurs should have a higher degree of psychological ownership, which might be a major factor that differentiates entrepreneurs from management workers and employees. This research thus contributes to entrepreneurship research by extending the construct of psychological ownership (Pierce, Kostova, & Dirks, 2001; 2003) to the field of entrepreneurship.
The Erasmus - EIM - Panteia Entrepreneurship Lectures Series is co-organized by Erasmus Research Institute of Management ( and EIM Business & Policy Research (EIM/Panteia), an independent and international research and consultancy organisation, specialised in SMEs and Entrepreneurship. EIM is part of the Panteia group.
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Contact information:
Katrin Burmeister-Lamp