With the rise of crowd funding, tech start-ups and the popularity of TV programmes like Dragon’s Den, there has been a lot written about small businesses and first-time entrepreneurs. However, there is little discussion or research into the rising phenomenon of serial entrepreneurship, where entrepreneurs don’t just cash in on their first business and hang up their boots.
The respected private bank and wealth manager, Coutts, sees serial entrepreneurship as a key to the success of the UK economy. Against this backdrop, Coutts and the Centre for Entrepreneurs have published a report entitled ‘Beyond the first business: the myths, risks and rewards of being a serial entrepreneur.’ The report surveyed 135 UK based entrepreneurs to provide an overview of the depth and extent of serial entrepreneurship in the UK.
Alex Liddle, Coutts Executive Director, South East England, commented in the findings: “Millennials are widely challenging the notion that entrepreneurs hang up their boots and retire after just one business. Entrepreneurs are starting businesses younger and have faster expectations to sell. These factors, together with longer life expectancy, mean we are starting to see a new breed of serial entrepreneurs. Instead of starting businesses from scratch, more of these seasoned business owners are now investing in and mentoring a portfolio of companies. There is huge untapped potential for serial entrepreneurship, and the role of experience seems invaluable to success. Unlocking that further could provide significant economic benefits.”
The research found that there are two main factors driving the rise in serial entrepreneurs: First, entrepreneurs are starting businesses younger: more than half (57%) started their first business by the age of 25 versus only 23% of those aged 35 and above. This group also had expectations of selling faster, with 63% of our younger respondents planning to exit their current business within the next five years, versus 46% of those 35 and over.
Second, longer life expectancy and a low-interest-rate environment means there is greater appetite among one-time founders to put their capital to work. They are looking to recreate the buzz of working in a fast-growing business, but, by their very nature, they are unlikely to want to work for someone else, and in many cases the thought of starting another business from scratch is too much. So they are looking to take more of a hands-off approach across a number of companies.
The attitude of serial entrepreneurs to actually running a business is also a key differentiator, with only 55% saying they enjoy this, versus 80% of one-time founders. Serial entrepreneurs are less likely to enjoy day-to-day business involvement. Instead, an increasing number of these seasoned business owners is considering other options, including mentoring a portfolio of companies, being non-executive directors or being angel investors.
Perhaps unsurprisingly, responses from serial entrepreneurs suggested they are less afraid of failure, with only 13% saying they experienced this fear, compared to 40% of one-time founders. While 67% of one-time founders acknowledged good fortune as a contributor to their success, only 56% of two-to five-time founders and 36% of six-to ten-time founders did so.
One particularly interesting finding of the report was that growing wealth, though one consideration for entrepreneurs, is not the dominant motivation. Other considerations rank higher, such as growing a business (90%), interacting with people (79%) and contributing to society (73%).
This helps shed light on why serial entrepreneurs are attracted by roles that allow them to share their knowledge and experience more widely to guide young entrepreneurs. A number of Coutts’ entrepreneur clients participate in its mentoring programme for first-time entrepreneurs. This has led to some of these mentors developing a solid relationship with the mentees, sharing their contacts and expertise, with some considering investing in the businesses of their mentees.
Other findings from the report include:
- Serial entrepreneurs are more pessimistic about a healthy work/life balance, with 47% conceding that success requires putting business before your personal life – compared with only 36% of one-time founders.
- The businesses owned by female respondents tend to be smaller: 92% of respondents cited turnover as below £500k, compared to only 59% of men.
- A fifth of one-time founders have experienced a stock market listing, compared to less than 2% of serial entrepreneurs – perhaps because one timers build their businesses for longer. Matt Smith, Director, CFE said: “To go beyond the first business can be an entirely different challenge to being a one-time founder. We wanted to create a report that explores the motivations, fears, and ingredients for success that surround serial entrepreneurialism. Our report delves into the role of luck, the attraction of multiple projects, and attitudes towards risk, but also indicates areas for growth: How do we encourage more women entrepreneurs? Should we remove the stigma around closures? It’s food for thought and a glimpse into Britain’s entrepreneurial mind-set.”
Entrepreneur case studies included in the report include:
- Mark Hogg, Founder of IFE Services and Oceans TV, market-leading in-flight and cruise ship entertainment, whose latest businesses invest in biomass and solar power technology in Africa and the UK.
- Paul Atherton, serial entrepreneur investing in university spin-outs. His latest venture is an ambitious battery company.
Coutts
Coutts is widely recognised as one of the leading private banks and wealth managers in the UK. Our progressive, long-term approach to wealth management is founded on experience gained through looking after clients and their financial affairs for over three centuries. Renowned for intelligent relationships, we provide expert wealth management, private banking and financial planning advice. Headquartered in London with regional offices including Guildford, Thames Valley and Tunbridge Wells, Coutts is part of the Commercial & Private Banking Division of the Royal Bank of Scotland.
Coutts has always been in the business of supporting successful individuals and over the last few decades our entrepreneur client base across the broader enterprise community has grown significantly. Successful entrepreneurs choose Coutts because we understand the nature of their success, we can support them at each point in the development of their business and introduce them to someone who has already taken the same steps, and is happy to share their experience.
To receive a copy of the report please contact Alex Liddle on alex.liddle@coutts.com or for further information please visit coutts.com
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The Centre For Entrepreneurs (CFE)
The Centre for Entrepreneurs promotes the role of entrepreneurs in creating economic growth and social well-being. In Spring 2014 it took ownership of the StartUp Britain campaign. The Centre is
an independent non-profit think tank founded and chaired by Sunday Times columnist and serial entrepreneur Luke Johnson and housed within the Legatum Institute – a non-partisan think tank best known for its annual Prosperity Index. The Centre researches and communicates the positive impact of entrepreneurs on the economy and society, and encourages entrepreneurship as a career choice.
centreforentrepreneurs.org/
