Last week, I was catching up with an entrepreneur who was working on his second serious startup. His previous startup started strong but ultimately wasn’t a success. After talking for a while, it got me thinking about round-two entrepreneurs.

The typical term is “serial entrepreneur,” implying that you start one company after another. However, this term isn’t fully descriptive, as there is a significant amount of side-hustle entrepreneurship—important, but different from being a full-time, all-in entrepreneur for multiple years.

Round-two entrepreneurs are those who have been full-time entrepreneurs, experienced a poor outcome, and then stepped up to do it all over again. Having that failure under their belt, along with a tremendous number of lessons learned, creates a different dynamic when starting anew.

Here are a few thoughts on round-two entrepreneurs:

1. Appreciation for the Game

Entrepreneurship is incredibly difficult and filled with high highs and low lows. After going through the experience once—especially when it doesn’t work out—the challenges don’t necessarily become easier, but there is a deeper understanding and perspective that differ from the first time around.

2. The Importance of Mentors

Often, during round one, it’s easy to believe you can figure everything out on your own and that you have all the answers. Of course, this isn’t the case. At some point, most entrepreneurs realize they need help, and that’s where mentors and coaches come in. Round-two entrepreneurs are much more likely to seek out expert advice and bring in mentors from the start.

3. Researching for the Best Idea

In round one, entrepreneurs often chase the first good idea they come across. Sometimes, the idea is great, but often, it isn’t. Round-two entrepreneurs have a greater appreciation for the importance of the market they’re targeting and the idea within that specific market. This typically translates into spending more time finding the best idea possible—not just a good one. If you’re going to spend 10 years building an amazing business, why not spend an extra 6 to 12 months making sure you’ve found the best possible idea?

4. Speed in Building a Team

After working as a first-time entrepreneur for many years, you naturally come across a variety of people—employees, partners, vendors, investors, and others involved in the industry. Through this process, you develop a sense of the types of people you enjoy working with, the skill sets that complement yours, and relationships that can be beneficial down the road. 

As a round-two entrepreneur, you get the advantage of tapping into these connections, which translates into building teams and forming partnerships more efficiently.

5. Stronger Opinions on Financing

After going through a startup that doesn’t work out, most entrepreneurs learn valuable lessons about angel investors, venture capital, and other types of financing. In many cases, this leads round-two entrepreneurs to be more resourceful, more efficient, and more focused on customer-funded growth. They also become more strategic about preserving ownership while maximizing opportunities to bring key team members or co-founders into the fold with appropriate equity.

Round-two entrepreneurs tend to value people equity more appropriately than first-time entrepreneurs.

6. Lower Ego and Greater Humility

After the first round of entrepreneurship doesn’t work out—and after countless lessons learned—I typically see round-two entrepreneurs with a lower ego and a more humble approach.

When a startup doesn’t work out, it’s incredibly painful. There’s a lot of soul-searching and reflection on what worked and what didn’t. This experience translates into round two in several ways: the entrepreneur is more open to feedback, more focused on customer discovery, and generally approaches the business with a more refined mindset.

Final Thoughts

Round-two entrepreneurs are some of my favorite types of entrepreneurs to work with. After years of effort that didn’t result in success, they still want to pursue the entrepreneurial journey again. That resilience separates casual entrepreneurs from those who are truly committed.

Failure is normal and often the most common outcome. But just because you’ve been knocked down doesn’t mean you can’t get back up. Round-two entrepreneurs step back into the arena with a newfound perspective—and a little extra spring in their step.