Founder-led companies can make for great businesses -- and investments. Chris Zook and James Allen, authors of The Founder's Mentality, write that such businesses are more innovative because they demonstrate "business insurgency" (the ability to go against the grain or to form new industries) and a "front-line obsession" with their business (think of someone like Mark Zuckerberg or Elon Musk).

Founders often think like long-term shareholders thanks to their significant ownership and investment (both in terms of time and money) in the company. They take risks and are often problem solvers familiar with the challenges in their industry as these pain points are often what motivated them to found their companies in the first place.

What's more, founders often toil away in obscurity for years before receiving significant attention or investment, so they have the grit to deal with challenges. Research from Purdue University's Krannert School of Management finds that founder-led companies are more innovative and generate more patents than other businesses.

Continue reading

Source Fool.com