Founder Equity makes early investments in promising digital businesses. Our model is based on value investing, very active participation in growing our portfolio companies, and quick paths to liquidity.
Enterprises must move more quickly, or die
Established companies know how to create new products, enter new markets, and roll out new operational systems. But in the modern economy, that may not be enough to guarantee survival. The increasing pace of change in business models, technologies, and systems is putting intense pressure on established companies. That's why the average lifespan of a company on the S&P 500 has dropped from 67 years in the 1920s to 18 years today - and is trending down.
Established companies are structured for execution, not disruption
Businesses, at their core, execute systems of value creation, delivery, and capture ("business models"). Established businesses are optimized for execution; their budgeting, risk management, incentive structures, and world-view are all oriented around their existing business model.
That's why enterprises must acquire or die
Because disruption involves making "significant changes" to these systems, established firms find it extraordinarily hard to transition from execution to disruption. That's why 80% of intrapreneurship projects fail, according to research by Beth Altringer at Harvard. In most cases, the only viable option for established companies is to acquire disruptive upstarts that threaten and / or provide new opportunity.
We invest in the business enterprises desperately need, but cannot build for themselves
Founder Equity focuses on startups that solve significant challenges for large enterprises, improve performance of their key divisions, or both. Our goal is to work closely with founders to improve velocity and validate the business model leading up to an acquisition by a strategic partner.
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