How to Build a Company Warren Buffett and Charlie Munger Would Actually Invest In (Even If You Hate Math)
- Jul 16
- 7 min read
Updated: Sep 1
Before the Money Comes Clarity
"We don’t look at spreadsheets first. We look at the business." – Warren Buffett
There comes a time when you feel it's time for capital. To accelerate. To build structure. To stop carrying it all on your own.
But before you ask, "Who will fund me?", ask this instead:
"Have I actually built a business Warren Buffett would want to invest in?"
Buffett and Munger don’t invest in shiny promises, clever pitches or EBITDA inflated with creativity.
They look for solid businesses. With sound logic. Built with patience. Financial sanity. Mature teams. And leaders who don’t disappear when things get hard.
Yes, numbers matter. But only after you pass the fundamentals test:
Clarity. A solid model. Operational logic. Good people. A living culture. And decisions built to last.
If those aren’t clear, numbers won’t save the image.
This isn’t about how to "pitch better." It’s about how to build something worth keeping. Or supporting. A business that attracts trusted capital. Or better yet, one you’d gladly own yourself.
"If you're not willing to own a stock for 10 years, don’t even think about owning it for 10 minutes." – Warren Buffett
The Foundation: How to Build Real Value
Don’t Start a Business You Can’t Explain
"Knowing your circle of competence is the most important thing in investing." – Warren Buffett
Don’t get into something just because it’s "hot."
Enter a field you deeply understand.
Where you know what works, what doesn’t, how money is made, and how it’s lost.
Can you explain your business to a 12-year-old?
Or to an investor with 30 seconds and a coffee in hand?
If not... maybe simplify. Or revisit what you're really selling.
People of Integrity Matter More Than Flashy CVs
"You want to partner with people you admire and trust." – Warren Buffett
"Show me the incentive and I’ll show you the outcome." – Charlie Munger
Buffett often says you look for 3 qualities in people:
”Intelligence, energy, and integrity.
But without integrity, the other two can be dangerous.”
Better a calm, fair teammate than a brilliant one pulling in the wrong direction.
Good people aren’t just skills.
They’re character.
And Munger was right: incentives shape behavior.
If you reward only speed, you might lose direction.
Create environments where good people can make good decisions.
Set clear expectations.
Align incentives with what you want to build, not just what you want to report.
Trust isn’t negotiated.
It’s built, day by day.
In small decisions.
In how people act under pressure.
In the quiet confidence that things run even when you’re away for 3 days.
Everything working? Or everyone just waiting for you?
If It’s Easy to Copy, It’s Easy to Lose
"In business, I look for economic castles protected by unbreachable moats." – Warren Buffett
Buffett calls them "moats" – competitive advantages that protect you when competition shows up.
Anyone can launch a website. Copy an idea. Hire a louder marketer.
The real question is:
What protects you from a better-funded competitor?
Not everyone can recreate a meaningful brand, a healthy culture, a loyal network, or a model that works even in crisis.
Those are the things that outlast hype.
It doesn’t have to be spectacular.
Just hard to replicate: your reputation, your way of delivering, your team’s thinking.
Don’t panic if you don’t have it yet.
But start building it.
Not to look valuable.
To be resilient.
Keep It Simple: A Business Anyone Can Run
"Never invest in a business you cannot understand." – Warren Buffett
”Take a simple idea and take it seriously." – Charlie Munger
Your business should be clear and logical.
Not a complex math equation.
If it takes jargon, complicated diagrams or 20 slides to explain how you make money... it might not be clear.
To you. Or anyone else.
And if you don’t fully get it, who will?
"Invest in a business that even a fool could run. Because someday, a fool will." – Charlie Munger
Clarity of model reflects clarity of mind.
Avoid jargon.
Don’t fall in love with complexity.
Simple doesn’t mean shallow.
It means scalable.
Clarity builds trust.
In your team.
And in the eyes of an investor.
Treat the Money Like It’s Yours. Because It Is.
"The first rule is not to lose. The second rule is not to forget the first rule." – Warren Buffett
Buffett never invested in companies that burn money elegantly but aimlessly.
He’s not impressed by big numbers if they come with operational chaos or stylish waste.
Investors don’t care how cool your office looks.
They care how wisely you use capital.
You don’t have to be stingy.
But don’t throw money at everything that looks urgent or trendy.
Don’t invest in ego. Invest in what builds long-term value:
Good people
A meaningful product
Clear processes
A healthy culture
When you treat money like it’s yours, even if it comes from investors, you show maturity.
That you’re not chasing applause.
You’re building something worth backing.
If you can’t justify the expense to your wiser, future self with gray hair and more patience... Maybe don’t make it today. 😅
If you had to explain every dollar spent to Buffett tomorrow, would you feel confident?
Or start with, "Well... I had this idea..."
Real Value Takes Time
"The big money is not in the buying or selling, but in the waiting." – Charlie Munger
"Our favorite holding period is forever." – Warren Buffett
Great businesses don’t grow fast.
They grow steadily.
With patience.
With discipline.
With small, smart steps.
Patience isn’t just a trait.
It’s a competitive edge.
Many companies get lost rushing: Switching strategies each quarter.
Cutting essential parts just to hit a KPI.
Chasing short-term praise instead of long-term health.
Solid businesses build for the long run.
They don’t skip steps.
They don’t panic.
If you’re trying to impress in 6 months, you might break what you built in 6 years.
Buffett and Munger didn’t invest in what moves fast.
They invested in what’s built to last.
So ask yourself: Is your business built for a sprint? Or a marathon?
And if there were no pressure to grow tomorrow…
Would you still build it the same way?
Learn Faster Than the World Changes
"Go to bed smarter than when you woke up." – Charlie Munger
What you know today might not help you tomorrow.
But what you choose to learn… can be the difference between relevance and stagnation.
You don’t have to be a genius.
But you do have to be curious.
Open.
Willing to ask uncomfortable questions.
And you need a team that doesn’t just execute.
They ask, understand, adapt.
In a fast-changing world, learning isn’t a luxury.
It’s a strategy.
Make learning a habit, not a crisis.
Build a team that asks better, not just works faster.
Frugal Doesn’t Mean Small. It Means Mature.
"If you buy things you don't need, you’ll soon sell things you do need." – Warren Buffett
Spend on what sustains the business.
Not what looks good in pictures.
Don’t confuse frugality with stinginess.
It’s about financial discipline.
Don’t cut what feeds your company.
But don’t wrap it in glitter either.
Financial health doesn’t show on LinkedIn posts or fancy floors.
It shows in your cash flow — especially on the not-so-glorious days.
Numbers Don’t Convince.
They Confirm.
"The three most important words in investing: margin of safety." – Charlie Munger
"Cash combined with courage in a crisis is priceless." – Warren Buffett
Buffett and Munger don’t start with numbers.
But they don’t ignore them either.
Once they understand what you’ve built, they ask:
“Does this actually work?”
They don’t want colorful forecasts or creative EBITDA.
They want to see:
”Can this company survive a bad year? Or two?”
And two things matter more than anything else:
Cash isn’t a detail. It’s oxygen.
You can show profit on paper and still have an empty bank account.
You can grow 30% and still miss payments to suppliers.
Buffett looks at operational cash flow because that’s where the truth is.
Your business… is it making money?
Or just making promises?
P&L can lie.
Cash flow doesn’t.
Ask yourself:
If you stopped all funding tomorrow…
Would your business run on what it generates?
Or is it on capital life support?
Leave Room Between You and the Cliff
This might be the most important financial idea in Buffett & Munger’s playbook:
“Margin of safety” means:
don’t build your company so it only works if everything goes perfectly.
Because guess what?
Things never go perfectly.
It’s like crossing a bridge that holds 5 tons… with a 5-ton truck.
Might work.
Might not. 😅
But if you enter with a 3-ton truck — you have margin.
You have space.
You have real chances of making it to the other side.
Only invest (or ask for investments) when even the pessimistic scenario makes sense.
Buffett doesn’t invest in businesses that work only if there are no surprises.
He invests in ones that survive crises, competition, and bad weeks.
Plan like you’ll make a mistake — and still stand.
That’s financial safety. That’s maturity.
It’s Not Easy. But It’s Possible.
"You don’t need to be a genius to succeed in business. You need a sound temperament, good judgment, and patience." – Warren Buffett
Building a company Buffett or Munger would invest in isn’t a quick formula.
It’s a blend of clarity, character, patience, and discipline.
You don’t build to impress.
You build to endure.
To matter.
To look back 10 years from now and feel proud — not lucky.
And yes, it’s hard.
But you don’t have to do it alone.
If you feel you need structure, clarity, or just someone to ask the right questions at the right time…I'm here.
One final question:
If you were the investor…Would you buy your own business at the price you're asking others to?
And if you had to buy it again tomorrow…Would you build it the same way?