Our investment philosophy is steeped in the belief that Entrepreneurial leaders establish organizations with Environment, Social and Governance (ESG) benefits. They build high potential growth organizations with relatively modest impact on the environment while creating lots of jobs and strong organizational governance.
Due to the strong organic growth and lower M&A activity, entrepreneurial companies have lower staff turnover compared to non-entrepreneurial companies. This improves community stability, reinvestment in the community, and long-term community plans. It also maintains a more productive, cohesive, and healthy corporate environment.
Our research shows that entrepreneurial companies invest considerably more in Research and Development R&D compared to non-entrepreneurial companies. This higher investment in R&D and the pursuit of innovative products help fuel the growth of the underlying economy.
We note that entrepreneurs have a higher than average ownership stake in their companies as well as a longer duration in their positions. Given the strong association, these leaders hold with their companies, they also have high name recognition associated with their company. Consequently, they have both economic and non-economic incentives to minimize inappropriate behavior.
Since entrepreneurs view organizations through the lens of wealth creation, they typically hold a non-biased view towards building the executive team. As a result, they are more willing to engage the talents of other team members regardless of race, religion or gender.
Entrepreneurial companies generate above-market job growth over an extended period of time. They typically create jobs, at all market cap levels, at a much higher pace than other non-Entrepreneurial companies in the same sectors and market capitalizations. Many non-Entrepreneurial companies actually reduce job.
Entrepreneurial companies have a strong orientation toward organic growth. Entrepreneurial leaders are inclined to form active strategic alliances/ partnerships and licensing. They also tend to have lower numbers of M&As and prefer organic growth. In instances in which Entrepreneurial companies do acquire other companies
Entrepreneurially run companies achieve higher long run growth rates, they have stronger organic revenue and asset growth. They generate more profits, consumption and building assets and as a result contribute more money into their respective communities who benefit with higher tax base and higher consumption.
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