The Role of Tech Founders in Stock Performance: The Information’s Tech Briefing

Are founder-led firms necessarily better bets for investors than those led by managers? An article on Reuters concluded as much, reporting that “Major founder-led tech firms have seen their share prices double so far this year, comfortably beating a 7.8% gain for the S&P 500 index” and also doing better than those led by hired hands. The report focused on Netflix, Amazon and Tesla, three stars of the market this year. Do they prove the case?

There are certainly plenty of other examples, including Zoom Video, led by its founder Eric Yuan, whose shares are up 700% this year. Other founder-led firms that have outperformed include Peloton, Pinterest and Spotify. Then again, there are a few that haven’t done so well. Most obviously, Facebook, whose shares are up 25% since the start of the year, also beating the S&P but not by anywhere near as much.