While the number of US public companies has fallen from over 6,000 to 4,000, this decline is concentrated in micro-cap and small-cap stocks. For diversified, long-term investors, the loss of these smaller, often less-stable companies may not have significantly impacted overall market returns.

Counterintuitively, data shows that companies in higher market cap bands (e.g., $10B to $100B) have a statistically better chance of achieving a 10x return than those in lower bands. This supports the strategy of doubling down on winners, as the 'next double' is often easier for established platform companies.

Most management teams, particularly in smaller companies, are hardwired to optimize for one primary variable: revenue growth, profitability/cash flow, or balance sheet safety. Investors must identify this core focus to understand the company's strategic biases and potential blind spots.

Contrary to popular belief, the historical underperformance of IPOs is driven almost entirely by smaller firms. Professor Jay Ritter's research shows that companies with over $100 million in annual revenue at their IPO have, on average, matched market performance post-listing, making size a key differentiator for investors.

Financial reporting often misses the crucial details of governance. Whether founders or investors control the board can be a more telling indicator of a company's long-term trajectory than the size of its funding rounds.

Investment research suggests the significant performance signal in governance isn't achieving a perfect score, but rather avoiding companies in the worst decile. The key is to steer clear of clear red flags—like misaligned boards or poor capital allocation—as this is where underperformance is most clearly correlated.

To influence operationally-focused micro-cap management, adopt a "suggestivist" role. By demonstrating a deep understanding of their business and offering valuable insights on peer strategies or capital allocation, you can build trust and achieve change without a hostile activist campaign.

Market efficiency increases with company size and liquidity. Therefore, the excess returns (alpha) from investment factors like value are significantly larger in the inefficient micro-cap space. For large-caps, the market is so efficient that factor premiums are minimal, making low-cost indexing a superior strategy.

Karri Saarinen argues that investors without direct operational experience often make better board members. They understand their role is to provide capital and high-level guidance, not dictate day-to-day strategy. This prevents them from misapplying lessons from their past company to your unique situation.