Empirical data presented in this paper was derived from a wider international study of founders of new ventures (Birley and Westhead, 1992, 1993). Although the study was not designed specifically to compare novice, serial and portfolio founders, the research instrument enabled us to identify these three types of firm founders. Because there is no comprehensive list of independent firms in Great Britain a pragmatic approach was taken in the construction of the survey frame. Based on the assumption that local economic development units were most likely to be concerned about the profile of their business population, local business directories were taken as the primary data source. Lists of 'potential' independent businesses were identified. Questionnaires were sent by post between 1.10.90 and 31.3.91 to the principal owner-managers of these businesses. Some 744 questionnaires were returned, of which 621 questionnaire responses covered businesses between 1 and 50 years of age and the respondents had specified their age when they had started their first business.
In total, 389 businesses (62.6%) involved novice or one-shot founders, that is the business concerned was the first to be established by the key founder. A further 75 businesses (12.1%) involved portfolio founders, where the key founder had owned two or more businesses and still owned the first business. The remaining 157 businesses (25.3%) were serial founders who had owned two or more businesses but who did not now own the first business. Of the serial founders, 61 (9.8%) founders had sold their first business, while the remaining 96 founders (15.5%) had either closed it or had other reasons for not still owning it. On the downside, reflecting a common weaknesses of prior research in this area the characteristics of the other businesses owned by portfolio owner-managers were not collected. As a result, the full economic contribution of portfolio owner-managers cannot be assessed by this study.
No statistically significant differences were identified between the
groups of novice, portfolio and serial founder firms with regard to three
demographic attributes. Over 52% of firms in each of the groups were
engaged in service activities (59.9%, 56.0% and 52.2% of novice, portfolio
and serial firms, respectively). A slightly larger proportion of
portfolio firms were located in rural areas (those located in an area with
less than 10,000 people), although not in a statistically significant direction
(26.2%, 32.0% and 22.9% of novice, portfolio and serial firms, respectively).
In addition, no marked differences in the age of businesses since they
received their first order was recorded (on average 7.3, 6.2 and 6.9 years of age for novice, portfolio and serial firms, respectively).
TESTING THE PROPOSITIONS
Chi-square and one-way analysis of variance (ANOVA) tests were conducted to identify statistically significant differences between founders and firms in the three ownership type groups. In total, data were collected on 95 variables which characterize the founder and the firm (for a summary description see Birley and Westhead, 1992). Dichotomizing between the three founder types statistically significant differences were observed for only 25 variables (26%). Because of space limitations, only summaries of the univariate results are presented below.
Personal Background of the Founder
No statistically significant differences were recorded between the three founder types with regard to the education level of the founder. As a result, proposition P1a cannot be supported. Whilst over 87% of the founders in each of the groups were male, as expected, a significantly smaller proportion of habitual founders, particularly serial founders, were females. In addition, a significantly larger proportion of portfolio founders rather than novice and serial founders were drawn from a managerial parental background. Novice founders, however, were significantly more likely than serial founders to be drawn from an unskilled employee parental background. Propositions P1b and P1c are, therefore, supported.
Portfolio owners may be able to found and own multiple businesses because they utilize partners, while the novice and serial entrepreneurs found their businesses alone. This 'team' aspect of entrepreneurship may be important in providing the skills and resources needed to maintain ownership of multiple businesses. As expected, habitual founders, particularly portfolio founders, were significantly more likely to have established their new businesses with an additional shareholder or partner. Additional research needs to clarify whether joint ownership is the key to the ability to maintain ownership of multiple businesses. Nevertheless, proposition P1d is tentatively supported.
As anticipated, portfolio and serial founders were significantly younger than novice founders when they started their first business with there being little difference between the average age of the two types of habitual founders. However, at the time of the survey, novice founders were significantly younger than habitual entrepreneurs, with serial founders being markedly older than novice as well as portfolio founders. Proposition P1e is, therefore, supported.
Work Experience of the Founder
Founders were asked to report on their work experience prior to the start of the business being surveyed in this study. As expected, habitual founders, particularly serial founders, had worked for more organizations prior to the start-up of the surveyed business. Supporting evidence presented elsewhere, habitual founders, particularly serial founders, were significantly more likely to have been self-employed immediately prior to start-up. Novice founders were, however, significantly more likely to have started their business in the same industry as their last employer, with portfolio founders being more likely to have changed their industrial focus. Habitual founders, particularly serial founders, were significantly more likely to have worked in a small firm with less than 100 employees prior to start-up than was the case for novice founders. In marked contrast, significantly more novice rather than habitual founders had last worked immediately prior to start-up in a large firm with 1,000 or more employees. As a result, propositions P2a, P2b and P2c are supported