How serial entrepreneurs are changing the process of wealth creation

Technology innovations and job creation initiatives have made it easier than ever for entrepreneurs to start new companies.

Serial entrepreneurs are capitalizing on the opportunities presented by the current economic climate to start companies, grow them to profitability, sell them, and then start the cycle all over again. In the process, they also give new meaning to the way wealth is created. This provides valuable lessons for anyone who wants to repeat their success.

Key Findings

Serial entrepreneurs consult with consultants.
They also understand liquidity.
They have an exit strategy.

What can they teach investors?

Starting a company isn’t something everyone can do, but investors can apply some of the basic principles that serial entrepreneurs follow to their own wealth-building strategy.

If one of your goals is to increase your net worth, here are some tips for adopting the mindset of a serial entrepreneur:

Get expert advice: Running a business alone is difficult as your wealth increases. According to Bank of America’s 2024 Study of Rich Americans, nine out of 10 wealthy people have a financial advisor, and many have multiple advisors to help them make business and personal decisions when it comes to managing their money. If you’re looking to strengthen your wealth fund, consulting a financial professional is an important piece of the puzzle.
Understand the liquidity of your investments: Liquidity is a key element of any sound investment plan, so it is critical to understand how liquid or illiquid your investments are. As an investor, you should also be concerned about how things like a stock sell-off could affect your financial outlook.
Have an exit strategy: A well-thought-out exit strategy is a must for any serious serial entrepreneur, and this rule also applies to your investments. Whether you’re a value investor or prefer a buy-and-hold approach, you need to be clear about when it’s time to sell a particular stock or mutual fund. Without an exit plan, you could find yourself at a loss if some securities in your portfolio begin to lose traction.

When it comes to discussing liquidity events (such as selling a business), about a third of respondents said they initiate conversations, according to Bank of America’s 2024 study of wealthy Americans. Another third said their consultant initiates the conversation. And the final third said they do this with their advisor.

How to build wealth?

If you want to build a strong wealth base, you need to invest in the market. Investing in stocks, mutual funds, exchange-traded funds (ETFs), and real estate investment trusts (REITs) are proven ways to earn returns beyond what a savings account or certificate of deposit (CD) can offer. Even bonds, which are among the safest investments, have a place in the portfolios of savvy investors who want to balance risk. In addition, entrepreneurship, if successful, also contributes to increased wealth.

What is a serial entrepreneur?

The serial entrepreneur opened his own business at least twice. Many serial entrepreneurs have a long history of starting and sometimes selling businesses.

What do serial entrepreneurs do differently?

Serial entrepreneurs bet on the companies they build to create the wealth they desire. This does not mean that they do not invest in the stock market at all. They simply don’t rely on it as the only means of increasing the size of their asset base. So how do they do it?

Typical entrepreneurs develop a great idea that they use to launch a company, and then dedicate their time to growing their venture to the desired level of success. On the other hand, serial entrepreneurs start a company and then either hand over the reins to someone else while retaining ownership, or sell it for a tidy profit. By doing this over and over again, they take control of their financial destiny rather than being subject to the whims of the market.

Bottom line

Serial entrepreneurship is not without its disadvantages. Ultimately, most new businesses fail. The same is true for investing. This can often be hit or miss, but if you’re willing to look at your portfolio from a different angle, it can lead to better returns than expected.