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Relationships beat board seats
Altos puts that ahead of a board seat and has no interest in control. Ownership still matters, because skin in the game keeps interests aligned. But the founders worth backing are strong-willed and make up their own minds, and Altos gets nervous when a founder starts doing everything it thinks is the right thing.
Even Buffett's CEOs don't listen to him anyway. Disagreements get debated and talked over. Sometimes the founder listens and sometimes not, and in hindsight Altos has sometimes been glad a founder ignored it.
Learning runs both ways, and force can't produce love. Over time, the relationships grow and compound, and the investors can only take care of their own small universe of people and companies.
How do founders keep control after taking investment?
Many founders keep control through dual-class shares, where their stock carries extra votes. Google's 2004 IPO created Class A shares with one vote and Class B shares with ten votes. Meta, Snap, and other tech companies have used similar structures. Investors who buy the ordinary class get the economics of ownership but little say in decisions.
How does Buffett treat the CEOs he owns?
Berkshire Hathaway lets the managers of its subsidiaries run their businesses with a great deal of autonomy, a practice Buffett has described in his annual letters for decades. Its headquarters staff has historically numbered only a few dozen people. Buffett has said he looks for managers who love their work and leaves the daily running to them. Many sellers have chosen Berkshire in part because of this hands-off reputation.
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