Founder-led tech stocks outperform
by Stephen for Inside Venture Capital
Major founder-led tech firms outperformed the S&P 500 index’s 7.8% growth this year. Major tech firms saw their share prices double, surpassing the figures shown by other, manager-led tech firms, according to a Reuters analysis.
- Founder-led companies also beat out their competitors in capital expenditures, seeing growth of 20% compared with a decline of 2%. This should play out in future growth, with the founder-led companies eyeing net income growth of 22.8% in the next three years, with only 7.1% expected for non-founder-led companies.
- Founder-led tech firms saw profit growth of about 30% over the past five years, compared with 6.7% for companies led by managers.
- The top 400 founder-led firms across all sectors showed an average share price gain of 58.4%, far outstripping the 10% return for the top 400 stocks.
- David Brown, co-founder of venture capital firm Impellent Ventures, claimed that resetting periods are the most fruitful time for truly visionary entrepreneurs.