Our Big 4 investment criteria are as follows:

1. The CEO must have significant ownership in the company.
2. The CEO must have a big vision and a clearly defined plan designed to make that vision a reality.
3. The company must be profitable (or at least be making progress toward profitability).
4. The stock must be reasonably priced.

Chief among the Big 4 is the CEO’s ownership. We want to partner with and invest alongside entrepreneurs. Thus, we prefer CEOs that have invested their own money in the companies they run. When a CEO has “skin in the game” we don’t have to worry about his motivation. To be clear, stock options can be motivating, but they do not constitute skin in the game.

In general, companies run by entrepreneurs are more successful than companies run by professional managers. Professional managers tend to be more concerned with their management contracts than they are with building a successful company.

Russell Cleveland, president of RENN Capital Group, Inc., highlights a number of successful entrepreneurial CEOs in his book, Finding Midas.

For more information about the entrepreneurial CEO investing concept, please refer to www.ceoinvesting.net.


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