The process of starting anew after failure has been poorly recognized so far. To explain why some individuals become serial, while others remain novice entrepreneurs we propose to consider their learning abilities. We follow the assumption that entrepreneurs who can learn by failure are more likely to become serial entrepreneurs (Ucbasaran, Wright, Westhead, & Busenitz, 2003). Yet it is still little known what entrepreneurs learn by failure.

For some entrepreneurs loss of the venture may damage self-efficacy and motivation to start another one (Shepherd, 2003).There comes a question how entrepreneurs can benefit from failure of the venture and become successful serial entrepreneurs. The concept of real options reasoning seems to be promising for enriching the static theory of organization as it introduces dynamics related to the possibility of learning (Foss, 1998; McGrath, 1999). Therefore the question how entrepreneurs can use real options logic to improve learning by failure arises.