Governance
The risks that are different in founder-led companies
Not magnified, but different. Watch the velocity of founder selling, related party transactions, and the succession plan that never gets written.
Lawrence Lam
Lawrence Lam is the founder of Lumenary and author of The Founder Effect. He developed Lumenary's founder-led classification methodology which underpins the Lumenary founder-led indices.
Methodology
Which sectors are founder-led companies most common in?
The wrong question. Capital efficiency, not sector, is what identifies quality founder-led companies, and it works even in industries as dull as drinks.
Evidence
Notable examples of founder-led companies
Adyen at 15 years old, Kakao at 11, Atlassian founders on a $77k salary, and what Marcos Galperin built at MercadoLibre from a non-existent market.
Evidence
Chefs who eat what they cook: why founder-led companies are so desirable
Options and bonuses try to manufacture ownership and never quite manage it. Five observable clues that a founder is flying without a parachute.
Methodology
How to build a portfolio of founder-led companies
A portfolio construction framework built on founder ownership, and why volatility and risk are not the same thing.
Methodology
The Art of Selling
Institutional investors fail to beat a random selling strategy. A framework for deciding when to exit a founder-led position.
Evidence
Finding the edge of greatness
A European ticketing large-cap repriced 25% overnight on the Pfizer vaccine news. Faster, better, cheaper: a systematic way to see past hype.
Methodology
Searching for the source of alpha
Where outperformance actually comes from in founder-led companies, including the evidence on second-generation founders and smaller companies.
Evidence
When turnarounds work
Most corporate turnarounds fail. The academic evidence suggests founder-led firms are materially more likely to be among those that succeed.
Methodology
Avoid the acronyms and go for hidden niches
By the time companies have made it into an acronym, it is too late. Where the non-obvious opportunities sit in specialist manufacturing and hardware.
Methodology
Data: a different way to discover quality companies
Australian investors hold 66.5% of their portfolios in Australian shares, which are 2% of the world market. A method for screening the other 98%.
Governance
What the Royal Commission reminds us about investing
Ken Henry and Andrew Thorburn adhered to every textbook governance rule and it did nothing for NAB shareholders. The problem was ethics, not frameworks.