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Monday, October 7, 2013

The Rise of Parallel Entrepreneurship

Parallel entrepreneurship is an emerging trend in Silicon Valley. Entrepreneurs who are former workers in venture capital or who are affiliated with venture capital funds are especially likely to find parallel entrepreneurship a good fit. A parallel entrepreneur is one who oversees the startup of several companies at once. Because entrepreneurs are people with the rare skillset of setting a company’s vision and getting it off ground, it makes sense for them to focus on this skillset and to delegate the more mundane, ancillary tasks of a startup to subordinates or employees. Given how long it can take even a well-run company to start growing, an entrepreneur risks wasting his or her unique skills by focusing entirely on one company. Parallel entrepreneurship offers another key advantage; any advancement by one company (such as a new software program) can be used immediately by the other companies in the portfolio.

Once the entrepreneur’s batch of companies is up and running, he or she focuses on a new batch. Unsurprisingly, some parallel entrepreneurs prefer the phrase “company builder.” The company builders’ ties to venture capital are helpful because they allow them to get the funding necessary to grow a company quickly. While the process of building a company can still take years, secure financing relieves the company builders of typical startup worries and frees them up to do what they do best.

Not all businessmen are fans of parallel entrepreneurship. In the eyes of critics, parallel entrepreneurship dilutes the focus of a business leader during the crucial early years of a company. Whether parallel entrepreneurship is the proper route brings to mind debates from decades ago in corporate America between those who favored the conglomerate business model and those who advocated a “fit and focus” for companies. Which approach is correct depends on the circumstances; the entrepreneur’s personality, the business sector he or she is in, the competition, available financing, etc.

Joe B. Garza talks Asset Protection