Entrepreneurial Heuristics and Serial Entrepreneurs

Abstract

This dissertation is comprised of three separate entrepreneurship papers. Paper 1, "Entrepreneurial Heuristics...", found that being mentored, rather than either having extensive higher education or more work experience, was primarily responsible for entrepreneurs acquiring the simplified decision rules (heuristics) that can be useful to them in their business pursuits. The study also found that entrepreneurs do not seem to switch their decision making processes from a "rational man" (thorough) mode to a more abbreviated, heuristic mode as some current thinking suggests. Also in Paper 1 this researcher presented and utilized a 27 item heuristics scale which was used to identify "use of heuristics" by the entrepreneurs studied. Paper 2, "Female Serial Entrepreneurs...", examined the characteristics of female serial entrepreneurs (SE's) as a group of growing size and importance. Three areas- business size, hours worked in the business, and amount and type of capital raised- were explored through contrasting female SE's with female non-SE's and male SE's. The primary findings were as follows: the businesses of female SE's are larger than those of female non-SE's, and female SE's in the professional, technical and scientific services industry borrow more debt than female SE's in this industry, but they do not work longer hours than female non-SE's. It was also found that female SE businesses, in the industries examined in the study, have come to rival male SE businesses in size, as measured in revenues. Paper 3, "The Serial Entrepreneur Dilemma...", explained a conundrum: why serial entrepreneurs do not seem to outperform novice entrepreneurs. A literature review is given consisting of the scholarly thinking about the causes of the conundrum, and then three hypotheses are tested to explore the dilemma. It was found that looking at serial entrepreneurs and novices over time, rather than cross-sectionally, helps to explain the conundrum: the SE's are willing to take losses early on (thus not performing higher than the novices) in expectation of future profits. It was also found that in slow-moving industries, serial entrepreneurs performed much better than novice entrepreneurs in revenues, whereas in fast-moving industries the difference between the two groups in performance was negligible.