That’s my Baby!

fMRI brain imaging studies reveal what many of us suspected: entrepreneurial bonding to their company is like parental bonding to our children.

From today’s WSJ: “The emotional ties help explain why so many entrepreneurs are prepared to delay monetary gratification and stick with a venture in hopes of long-term success. That’s akin to parents making years of sacrifices on behalf of their children.” Children and companies are not “business as usual”; both fufill a common human quest for symbolic immortality. So, as long term investors, of course we bet on founders to build enduring value.

Now… imagine someone takes your baby away from you.

Activist investors may take misplaced pride in having done something tangible, but most often, they have exploited a short-term arbitrage opportunity by rupturing the soul of the enterprise.