Early entrepreneurship studies have often regarded entrepreneurs as a homogeneous group. More recently, scholars have recognised that entrepreneurs have different ownership propensity. Portfolio entrepreneurs, a sub-type of the habitual entrepreneur, are involved in a number of businesses simultaneously. By their very nature, these entrepreneurs are more experienced than their novice counterparts and studying them should enhance understanding of entrepreneurship. This thesis aims to explore why and how some individuals become portfolio entrepreneurs. The investigation is guided by a conceptual framework that explores the theoretical antecedents (e.g., human and social capital, motivation and risk) to portfolio entrepreneurship, how they engage in the entrepreneurial processes (e.g., opportunity search and recognition, entry and operational strategies) and the outcomes (e.g., business and personal) of their entrepreneurial activities. This is a qualitative study using a multiple case approach. Fifteen cases of portfolio entrepreneurs were selected and interviewed in-depth. Results show that portfolio entrepreneurs do have a distinct combination of human and social capital endowments, motivation and risk propensity. These antecedents allow them to formulate strategies that pave the way to portfolio development. While the reasons for the pursuit of the portfolio model vary across the different portfolios, it is evident that the portfolio is a result of the entrepreneur's opportunity and growth-seeking pursuits and a way to spread the risk inherent in business. The study reports strategies and heuristics that these entrepreneurs employ to manage the dynamics of a portfolio structure. At the business level, outcomes indicate that individual business benefit from being part of a portfolio. At a personal level, successful portfolio entrepreneurs do become high net worth individuals. Although financial motivation is evident at the early stages of their careers, money no longer features in later stages. Their satisfaction levels are high, and regrets are almost non-existent. They enjoy being in business and thrive in the many challenges that new products, systems, solutions and ways of doing things bring to the market and society.

This thesis is a contribution to our understanding of business groups in the small busi-ness sector. Specifically, its aim is to verify to what extent the consideration of entrepre-neurial processes can advance our understanding of this phenomenon. A ‘business group’ is a set of companies which are legally distinct but belong to the same person or people. Despite the significant presence of business groups in the small business sector, most of the literature on business groups addresses large groups. This study demonstrates that the available theories of business groups – the financial and the diversification theories – are not able to explain the presence and characteristics of business groups in the small business sector. Given the little work done on the issue, the research strategy involves the use of both, quantitative and qualitative methods. Quantitative methods are used to test propositions deduced from available models of business groups; qualitative methods, based on case studies and direct interviews, are used to get new insights about the phenomenon and develop theoretical propositions. Quantitative analyses refer to the population of Italian business groups; case studies and interviews refer to a sample of business groups in the Marche region (Italy). The business group is an organizational form used by portfolio entrepreneurs to grow and diversify the businesses under their control. By using cross sectional and longitudinal analyses this study shows that in the small business sector diversification is a substitute strategy for growth in the original business. Moreover, this study demonstrates that the diversification theory is not able to explain the setting up of a business group as in most cases the degree of diversification observed in small groups is very low. The thesis demonstrates that entrepreneurial processes associated with the exploitation of new business opportunities by portfolio entrepreneurs play a crucial role in explaining the formation and characteristics of business groups. The start-up phase is critical for the success of a new business as it requires complete dedication of time and attention by the entrepreneur to continuously adjust the planned actions to the unforeseen events and un-predictable contingencies that are typical of this phase. The legal autonomy granted to the new venture helps focus resources and monitor results. In addition to this and more than anything else, legal autonomy allows entrepreneurs to modify the ownership structure of the new business and give minority shares to people involved in the start-up. The financial explanation of business groups stresses the importance of legal autonomy as a way for manipulating the ownership structure of new businesses, to raise outside equity. The thesis demonstrates that the causal relationship is the opposite of that hypothesised by the financial explanation: it is not so much the aim of raising outside equity that determines the involvement of external shareholders as the need to involve and motivate people in the start up of the new business that induces entrepreneurs to sell minority shares in it, thus enlarging the entrepreneurial team. By involving other people in the start-up of new ventures, portfolio entrepreneurs enhance their ability to enter new businesses while retaining ownership and control of the ones already established. The empirical analysis revealed the existence of three different patterns: joint venture with established entrepreneurs, employee involvement and intrapreneurship. The first is when new ventures are set up with other established entrepreneurs. The second is when the entrepreneur gives a share of the new company to an employee to secure his/her involvement in the start-up of a new venture (employee involvement). The third is when the new business is established as a result of the inspiration of an ‘intrapreneurial’ employee who takes major responsibility for the development of the business. As well as the discovery and analysis of these three forms, the thesis provides a theoretical explanation of entrepreneurial team development in business groups, based on the problems faced by portfolio entrepreneurs in allocating time and attention between the running of established businesses and the exploitation of new business opportunities. By integrating the latter explanation with other models of business groups the thesis provides a more general framework for understanding the formation and dynamics of business groups in the small business sector. The thesis also provides contributions to explain the formation and dynamics of entrepreneurial teams in a multi business context and in situations where there is a ‘dominant’ or ‘lead’ entrepreneur and one or more ‘associate’ or ‘sub’ entrepreneurs. Studying the formation and evolution of business groups poses several methodological problems, as groups are complex systems, characterised by the presence of several companies, different architectural structures and a multi-business context. The thesis provides methodological contributions on the ways to represent the current structure of business groups and on how to analyse their evolution over time.

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