A new study out of Portugal shatters one of the biggest myths of entrepreneurship – the idea that previous entrepreneurial experience makes future endeavors more successful. The paper claims that serial entrepreneurs do better because of their ability to raise money more easily, not because of what they learned from their startup past.
While firms started by portfolio entrepreneurs (i.e. those who owned at least one other firm at the time of start-up) are significantly more likely to survive (thus confirming hypothesis H6), not all habitual entrepreneurs seem to have better chances of creating successful start-ups. Indeed, entrepreneurial experience in itself does not have a significant effect on survival probability, so hypothesis H7 is not supported. This suggests that the positive effect associated with portfolio entrepreneurs might be more likely to be due to the ability to raise funding (or deploy resources of currently owned firms in the new firm) than with experience as an entrepreneur.
It is very common among young entrepreneurial bloggers to talk about how you don't need to raise money for your startup. The argument is that if you don't have much money, you will be more resourceful, and that this is a good thing. Well, I don't buy that because I think you should be resourceful no matter how much money your company is making. If anything, I would say startups benefit from not having to be resourceful. Why spend 5 hours searching for the cheapest quote on something when you have million other things to do? Sure, maybe you can save 20% on the cost of a server, but it would be nice to wait until you have a lot of servers before you have to worry about it.
Honestly, I think a lack of funding causes you to make bad decisions. You are focused on the short-term, the next sale, tomorrow, and as a result, you never have time to sit back and put a solid foundation in place. Boostrapping is fine for side projects that you want to nurture over multiple years, but if you dream big, then you should raise the money to get it done big.