Life360 CEO Chris Hulls Sells $35 Million in Shares for Wealth Diversification

About Life360 Inc

Life360 (the Company, ASX: 360) is a dual-listed technology platform based in San Francisco that provides location-based services, including location sharing and notifications to consumers globally. Its core offering is the Life360 mobile application which is a mobile social networking app that is essentially a location-based service to enable friends and family members to share their location with each other. The location sharing and tracking capability extends to pets, and devices like iPhones. The app currently serves more than 76 million Monthly Active Users across 170 countries.

Co-founder and CEO in $35 million share sale

The co-founder and Chief Executive Officer of Life360, Mr Chris Hulls, sold approximately $35 million worth of shares in the Company on 15 November, representing about 1.2 percent of total outstanding shares. Following the sale, Mr Hulls will continue to own approximately 3.8 percent of the Company.

Mr Hulls has been with Life360 for 17 years and has close to 75 percent of his net worth in Life360 equity.

The primary reason for the share disposal was to diversify his wealth to secure his family’s future as well as to create a charitable foundation to undertake philanthropic projects in his local community. About a third of the share disposal has been a transfer to a private foundation and donor-advised fund.

Mr Hulls has committed to not undertake certain additional share sales in the next 12 months.

Founder-led companies consistently out-perform the market

There is a body of opinion that founder-led companies like Life360 should comprise a meaningful component of an active and self-directed investor’s portfolio. And importantly, this assertion is backed up by research.

A comprehensive study by Credit Suisse titled the “CS Family 1000” analysed one thousand publicly listed companies where the founder or founding family retained at least a 20 percent equity interest in the Company’s voting equity.

The study showed that founder-led companies generated superior revenue growth, higher cash flows and economic out-performance, compared to a non-family control group of over 6000 companies around the world. The study showed that founder-led companies outperformed broader equity markets by about 4 percent annually over the long-term. Similar results have been shown by studies undertaken by Bessemer Venture Partners while Bain & Company’s “Founder’s Mentality” framework also revealed that founder-like qualities achieve higher returns than share market averages.

The two key founder-led attributes common to these businesses are a deliberate focus on innovation, and long-term growth. Unsurprisingly, the co-founder and CEO of Life360 in an interview this month referenced these two key points. In response to a question about the potential of advertising revenue from Life360’s 75 million phone app users he stated that ultimately it may match the subscription revenue potential, however he added that “…….you don’t just turn these things on”. In other words, there is a disciplined and methodical process behind these initiatives, and they take time to execute successfully.

The underlying message for Life360 shareholders is that the Company’s innovative location sharing app with its disruptive and insurgent qualities, properly executed over time, is likely to deliver consistent long-term share price outperformance for patient, value-driven investors.