Founder connections
- Warren BuffettRecommendation
“If you are fascinated by investment theory and practice, you will enjoy this book.”
In the 2015 shareholder letter, dated February 27, 2016, Buffett praises Miller’s research on Buffett Partnership Ltd. and its connection to Berkshire’s culture. He says the book will debut at the upcoming annual meeting.Source
Summary
Jeremy Miller examines Warren Buffett’s early partnership letters and organizes the investment principles they contain. The book covers value, performance measurement, compounding and the expectations Buffett set with his partners before his better-known Berkshire Hathaway career.
Why read it Our view
Useful for deciding what you need to explain before accepting someone else’s money. Buffett’s early rules make his approach, limits and measures of performance explicit. A founder can use that example to review whether investors understand the time horizon, decision authority and results they should expect.
Decisions from the book
Agree on the rules before taking investors’ money
- Decision: Buffett needed to decide whether to accept funds before his first partners understood how he would operate.
- Action: He invited the initial group to dinner and explained his ground rules, including decision autonomy, performance measures and the absence of guaranteed returns.
- Outcome: Everyone invited signed on, and Buffett accepted their checks. New partners later received the same explanation, and the rules were sent to partners annually.