Underappreciated Evergreen Companies: Capitalism at Its Best with David Whorton

12/15/2023; 107 minutes

After founding four companies and working at top firms in venture capital and private equity, where fast growth and maximum profits rule, David Whorton, Founder and CEO of the Tugboat Institute, has spent the last decade exploring and developing the concept of the evergreen company—one built to last privately over 100 years. The evergreen company stands in contrast to those that are being built to flip to generate wealth for a small few. Instead, evergreen companies are being built with very long planning horizons and the commitment to share their success with their employees and their communities. Whorton argues evergreen companies are incredibly important to our society, but overlooked and under-appreciated relative to venture capitalists, private equity and public companies that represent the de facto growth company models.

Since the dot.com boom, the de facto growth model for venture capitalists has been get-big-fast. It later evolved to growth-at-all-costs with the advent of cheap money under loose Fed policies. This play book led to numerous excesses, including the manic pursuit of ever larger and higher valuation rounds in hot companies. In the same period, private equity has risen dramatically, unwisely seen by many as a safer asset class than public stocks; an industry sits on over a trillion dollars of dry powder to invest, matched with a couple trillion of debt, giving the private equity firms purchasing power over $3 trillion dollars. Recorded on 09/26/2023.

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