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# Notable examples of founder-led companies
- URL: https://research.lumenaryinvest.com/notable-examples-of-founder-led-companies/
- Published: 2021-10-06T10:00:00.000Z
- Updated: 2021-10-06T10:00:00.000Z
- Description: 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.
- Author: Lawrence Lam
- Tags: Evidence

*First published in [Livewire Markets](https://www.livewiremarkets.com/wires/meet-the-fundie-who-pioneered-the-founder-led-strategy?ref=research.lumenaryinvest.com), 6 October 2021.*

The advantage of investing in founder-led companies is being able to access the potential of very driven founders. So I like to harness this hunger early in a founder’s lifecycle and maximise the runway. Readers will already know of the Walmarts, Alphabets, Amazons, Facebooks and Afterpays of the world – they’ve already been covered and are easily accessible by mainstream investors. I prefer to look elsewhere and focus on hidden compounders whose shares are less accessible and founders who still haven’t ‘made it’. This is how you leverage the founder-led strategy to its full potential.

Adyen (AMS: ADYEN) and Kakao (KRX: 035720) are stand-out next-generation founder-led companies you will hear about for decades to come. They’re also driven by some very astute founders. The reason why I like European and Asian founders is their longevity; they’re more focused on building long-term dynastic companies. It also diversifies away from US founders who tend to like to flip their companies. The founders of Adyen and Kakao have been there from the very beginning, and they have that ideal balance between longevity and runway. Adyen is 15 years old and Kakao is 11\. And of course European and Asian founder-led companies are much less hyped than their American counterparts.

I also like the founder’s philosophy that Mike Cannon-Brookes and Scott Farquhar adopt with how they run Atlassian (NASDAQ: TEAM). They’ve elected to pay themselves a salary of $77k – the minimum wage. You’ll often see this with true founders (Buffett included). Atlassian’s approach to reinvestment shows they’re not resting on their laurels, they’re still hungry and want to entrench themselves further in their customers’ ecosystems. They will continue to compound for many more years.

Then you have the game-changers like Marcos Galperin who transformed the entire continent of South America with what he did at MercadoLibre (NASDAQ: MELI). He launched MercadoLibre in 1999 as the ‘eBay of South America’ in a non-existent market. South Americans had low internet penetration rates and no interest in online shopping. The initial years were like drilling into clay; it was years before they reached soil. It wasn’t just persistence alone, but the willingness to reinvest and evolve the business. They went from a P2P model like eBay, to a broader shopping platform more like Alibaba’s. What’s more interesting though is how they fended off competition from eBay, Amazon, and a local rival called DeRemate in the early 2000s. There are several key takeaways for readers interested in founder-led investing:

- Galperin chose to develop MercadoLibre’s own IT infrastructure rather than buying off-the-shelf software – greater expense upfront, but much greater control and ongoing freedom. Short-term pain for long-term gain.
- Galperin made a calculated bet in 2003 to develop MercadoLibre’s own payment platform. It was only 4 years in; fintech wasn’t even a word yet – but that wasn’t a deterrent. Looking back now, this was a classic founder’s move – prescient and bold, but one which continues to reap benefits even 20 years on.

I have a lot of admiration for what Galperin has achieved as a founder. Though MercadoLibre is no longer the opportunity it once was; it’s a company which suits institutional investors now. The founder’s runway has changed – Galperin stepped back in 2020 and that spirit is not the same as it was in the early 2000s. I’m looking to find the next MercadoLibre.

Locally, I’ve always admired ARB (ASX: ARB) and how Andrew and Roger Brown have grown a seemingly simple local business into a global adventure brand. The fact that it all started from a dissatisfaction with low quality bull bars that prompted them to weld their own in a family garage is an amazing story. But then taking that one local shop and growing it into a global franchise, that’s something else. ARB wouldn’t be the global company it is today without its founders. To invert that thought – there’s no way a salaried CEO would have made those long-term strategic investments in the early days. They would have played it conservatively, protecting short-term profits at the expense of longer term compounding opportunities.

If you give two people the same business to run, one with equity ownership and the other on salary, you’ll get two very different outcomes. One will be playing a test match, the other will be playing T20.