The Leadership Premium
How TMT companies win the confidence of investors
TMT companies and their founders are synonymous even when it comes to investor confidence and share price. One only has to see how the name Bill Gates is so closely aligned with Microsoft, Mark Zuckerberg with Facebook or the late Steve Jobs with Apple.
However research amongst analysts of high growth companies indicates that after recent financial performance, the key attribute sought by investors is an effective management team.
Our paper The leadership premium – How TMT companies win the confidence of investors is part of a series looking at the challenges faced by the TMT sector.
Driven by interviews with financial analysts in key markets, it reveals the extent to which perceptions of leadership move share prices – and how leaders in the TMT sector can win market confidence and increase shareholder value.
The paper sets out the challenge faced by a company in creating shareholder value as it moves from concept, to early growth to one of sustained growth.
Commenting on the paper, Richard Howard, partner in Deloitte's TMT industry group, noted that the greatest challenge faced by the indigenous technology sector is the move from a pre-monetised concept to a sustainable business.
He said: "In Ireland, we have seen many companies either being sold to trade buyers at the concept stage or being unable to penetrate existing sales channels and stagnating, and this is largely driven by the strength of the management team. In working with a number of high growth indigenous technology companies, we have seen the premium in value that a strong management team brings to a company."
On average analysts questioned suggested that there is a value premium of 35% is attached to companies who have a perceived strong management team.
For further information please contact Richard Howard, T: +353 1 417 2906.