Who is more likely to succeed as a founder in a startup, a serial entrepreneur who hasn't had great success yet or an early employee of a successful startup?

The serial entrepreneur is more likely to succeed, all else being equal. I've worked with enough startups to see that the early employees and non-cofounder CEOs don't get the pressure, advice and hands-on learning that founder CEOs get. If you keep doing something as hard as starting a company, you want it badly. As long as you learn from your mistakes, you will have a better and better shot at becoming successful - all else being equal. There are several failed founder CEOs I would fund again or fund next time, regardless. There are also several early employees of successful startups I would fund. But on average I'm more likely to recommend them to be early employees of other startups.

I think startup success is a complex, nebulous thing. My answer to your question is B, because early employees of successful multi-billion dollar startups tend to have connections that help them get ahead. Quora was founded by two early Facebook employees. That said, WhatsApp's founder was rejected by both Facebook and Twitter. So "likely" is a dangerous word to use when talking about startups and their founders. The world of startups is almost like quantum mechanics in the sense that things rarely make sense (until they do). The good ideas look like bad ideas, and things are almost never obvious until on hindsight. The only thing that's actually likely is failure, across the board. The success of a startup is dependent on product/market fit, so the founder who is capable of achieving that is the one who's likelier to succeed. She could even be someone who's been a government employee for decades. It's unlikely until it isn't. EDIT: Thought I'd just add a thought about Terrence Yang's point that "If you keep doing something as hard as starting a company, you want it badly." This is fairly valid, but:   1: It's equally possible that the person who joined a successful startup is just as hungry, if not hungrier. 2: A person with multiple failed startups is limited to being a part of a small team, while a person who's worked in a larger startup has a better idea of how things change as teams get bigger. So re: the serial entrepreneur- Why did she fail? How did she fail? What were the causes of her failure? What did she learn from those failures? Those are the real important questions. What did she do before all those failures- does she have any working experience? If your life experience is nothing but a series of entrepreneurial failures, I think that is a bit of a troubling sign. You might be missing something fundamental somewhere.

The answer to a question like this is, it depends. I'm sure there are plenty of people out there who would do anything to make the next amazing tech company. Unfortunately for most of them it won't matter. There are an unlimited amount of variables when it comes to a startup! The amount of decisions you have to get right is just ridiculous. But before you can do any of that you have to blindly throw a stake down and say this seems like a worthy place to start digging. But even with that amount of randomness do you think the people who make successful companies are sick to their stomach about these decisions? Hell no. They see it as an oppurtunity to prove their company's worth. These type of  cofounders are usually aware of the consequences and risk of each decision but are so finely in tune with their intuition that they have no problem moving quick. So my answer is it's possible for both to pull it off. I tend to trust people who trust themselves so my money is usually on the serial entrepreneur who has a passion for creating and allows no one to stand in the way of that.

The number of variables involved with the success of a startup complicates things quite a bit. Comparing just two of them is useless. Being a serial entrepreneur or an early employee of a successful company does not make you inherently better at creating value. Infinite formulae of experience could result in success. You just have to rely on making a product that is different, useful, and MADE WITH PASSION. Passion leads to high expectations for your product. I have no doubt that growth is significantly boosted by high product quality and innovation inspired by high expectations. Attention to detail is a must. You should easily be able to find things you aren't satisfied with in ANY product. All of these things make more impact on the success of a startup. So my official answer is that the comparison you make is unimportant.