The phrase “serial entrepreneur” has become ubiquitous in Israeli high-tech circles. But what does it really mean for an ecosystem when the same people keep founding company after company? A new report by venture capital firm Battery Ventures, in collaboration with HSBC and Dealigence, seeks to answer that question, and the findings reveal just how deeply serial entrepreneurship is woven into Israel’s innovation economy.
According to the study, nearly 10% of all new startups globally founded by serial entrepreneurs are based in Israel, second only to the United States. Despite their far larger populations, countries such as the UK, France, and Germany trail well behind.
Israel also ranks first in the world in the ratio of startups founded by experienced versus first-time entrepreneurs: one in every 22 new companies is led by at least one seasoned founder. In comparison, the ratio in the U.S. is one in 38; in France, one in 62; and even lower in Germany and the UK.
Over the past five years, Israeli companies founded by experienced entrepreneurs have recorded exits totaling $75 billion, counting only sales above $1 billion. Many of Israel’s largest recent exits involved repeat founders, including the teams behind Wiz, Next Insurance, CyberArk, and Melio.
Why does this concentration of serial entrepreneurs matter? Data from PitchBook suggests that venture capital funds consistently prefer startups led by proven founders. The gap is stark: on average, early-stage startups founded by serial entrepreneurs raise four to five times more capital than those led by first-time founders.
For example, an experienced entrepreneur typically raised $12 million in early funding, compared to just $3 million for a new founder. Valuations at the time of fundraising were also two to three times higher for startups with experienced leadership.
Barak Schoster, the initiator of the study and a partner at Battery Ventures who has already achieved a successful exit, explains that fundraising speed and volume remain remarkably stable for serial entrepreneurs, regardless of the investment climate, while new founders experience far greater volatility. This, he argues, helps explain the relative resilience of Israel’s high-tech sector during the past two years of war and instability.
Why do funds prefer experienced entrepreneurs, who might be more opinionated and, at times, less easy to work with? The reasons range from the ability to better articulate a company’s story to the advantage of quickly recruiting an initial core team through existing networks. A high-quality first team is critical for building a startup and rapidly achieving product-market fit.
However, one of the main advantages of experienced founders lies elsewhere: in their ability to resist the temptation of an early sale, ultimately generating higher returns for investors.
“Entrepreneurs often receive offers that are hard to refuse early on and sell too soon. We see this very clearly in the Israeli cyber industry,” says Schoster. “A company like Dome9, for example, which was founded around the same time as Wiz and developed a similar product, was sold to Check Point in 2018 for $175 million, and that was too early. Today, the biggest exits are happening in companies run by serial entrepreneurs because they turned down multiple offers over the years.”
Who qualifies as a serial entrepreneur for the purposes of the study? Those who have founded at least two companies that were either sold or raised over $8 million. Although the importance of prior experience tends to decline as a startup matures, Israel still maintains its lead over European countries and ranks second only to the U.S. even in later-stage startups led by experienced founders.
“Great Openness to Failure”
The study also explores why Israel has such a high concentration of serial entrepreneurs, and what drives them to start new ventures after already achieving financial success.
“In other countries too, there are plenty of talented and highly motivated people,” says Schoster. “But in Israel there’s greater cultural openness, both toward making mistakes and failing, and toward sharing information, knowledge, employee referrals, and even gossip.”
The report also notes that Israel’s high number of exits constantly fuels movement among employees and founders. Recently, however, another force has been pushing entrepreneurs to start again: artificial intelligence.
According to data cited in the report from Anthropic, the company behind the Claude AI engine, Israel ranks first in the world in cloud usage on a per capita basis. Israelis use Claude seven times more than would be expected based on population size.
This widespread use of AI tools allows startups to test product alternatives more easily, recruit fewer employees at the early stage, and shorten development timelines, all factors that may help explain why so many Israeli founders, even after major exits, are eager to begin again.