The Difference Between Investing in a Co-Founder Led Company and a CEO Led Company
After closing my hedge fund and moving from the finance industry to the tech industry I don’t have as much time to invest anymore. I found recently that my inclination in this case has been to invest with a long term horizon in companies that are co-founder led, verses companies that are CEO led. By this I mean, companies that are led by their original founders and all companies that are relatively nascent (where their co-founders are still alive).
Examples of co-founder led companies that I am long are Google (Larry Page and Sergey Brin), Amazon (Jeff Bezos), and Yelp (Jeremy Stoppelman)
Examples of CEO led companies that I am short are Linkedin, Twitter, and Pandora.
I believe that the difference between the two, like my new investment horizon, has to do with the long term vision of the leadership. The average tenure of a Fortune 500 CEO is 4.6 years. It is very difficult for a CEO to think with a long term vision (and every tech company in this day and age needs to think long term) when they don’t have a 20 year tenure. No one envisions Bezos, Page/Brin, or Stoppelman being ousted so they all take long term horizons.