Faculty Sponsor: Professor Abigail Hornstein
Abstract: Serial entrepreneurs, defined as those who start multiple firms over their career, are recognized to be more likely to succeed than one-time founders. In this project, we build our models around one particular measure of success, inflation-adjusted firm-level return. Our finding is consistent with the literature and indicates that serial entrepreneurs, especially those who succeed in their first firm, tend to have significantly higher returns. In addition, we examine two possible components of success: the first component comes from investing in the right industry at the right time, which we calculate by averaging the returns of the cohort comprised of firms founded in the same year and industry; the second component, which we call the “excess return”, is the difference between a firm’s return and the cohort return of its peers. This second component captures managerial skills and other qualities that may set a successful entrepreneur apart. In the next stage of our work, we will look into founder payouts which we scraped from companies’ S-1 files on the SEC website. This could shed light on the potential drivers of an entrepreneur’s decision to start another firm.
2023-QAC-Hornstein-Pang-poster