Entrepreneurial failure and reentry: the role of prior financing experience

Abstract

How does the nature of prior entrepreneurial experience influence reengaging in entrepreneurship in the aftermath of business failure? Drawing on attribution theory, we investigate the relationship between the heterogeneity of prior entrepreneurial experience and reentry after failure by highlighting the role of prior financing experience. Our evidence shows that entrepreneurs with prior financing experience are less likely to reenter into entrepreneurship after failure. We also find that entrepreneurs with prior financing experience tend to attribute their failure to internal reasons which ultimately decrease the possibility of their reentry after failure.