Owner-run tech companies grew 30% over the past five years. This year, the shares of a total of 400 companies in all sectors operated by founders gave investors an average 58.4% return.
In the midst of the Corona crisis, technology companies operated by founders have performed better this year than companies run by other executives. According to Reuters, the share price of major tech companies operated by founders has doubled in 2020, while the S&P 500 index has seen a 7.8% gain.
According to Reuters, these major tech companies have given excellent returns to investors besides leaving behind companies run by managers and other executives. At the same time, the founders of the company have also raised billions of dollars. The list includes Amazon’s Jeff Bezos, Netflix’s Reed Hastings and Tesla’s Elon Musk.
Owner-operated tech companies grew 30% over the past five years. Meanwhile, the growth of companies operated by managers was only 6.7%. According to Reuters, tech companies led by the founders gave high returns after the financial crisis, in addition to rapid recovery. For example, in a booming environment, Amazon shares were up 50 times. While Netflix shares rose 100 times.
David Brown, the co-founder of venture capital firm Implant Ventures, says that good entrepreneurs are more intelligent and successful even during economic crises. He hoped that in the coming years some fantastic business will come in the market. This will also benefit investors.
According to the report, shares of a total of 400 companies of all sectors operated by founders this year gave investors an average return of 58.4%. While the shares of 400 companies run by executives gave investors an average return of only 10%.
According to the report, the business of several companies has been affected by the Corona epidemic. In such a situation, investors are hopeful that the companies may see an early recovery. However, the report states that most investors’ money can go to tech companies run by founders.
In the first half of 2020, there has been a 20% growth in the CAPEX of companies led by founders. While companies operated by others declined by 2%. According to data released by Definitive, average income growth of companies operated by founders is expected to grow by 22.8% over the next three years. While the growth of companies operated by others is estimated to be 7.1%.