All Posts Tagged: Wealth

The balancing act of the serial entrepreneur

Kristin Nelson
Private Business Owner Solutions

As a serial entrepreneur – that is, an entrepreneur who has started multiple ventures over the course of your career – you may face challenges that new entrepreneurs don’t. Specifically, your personal and business financial lifecycles may not always be in sync.

Serial entrepreneur, center, meeting with a male and female associate as the all discuss what's on a small sheet of paper in front of them.Although you’re a seasoned professional, your new venture is a toddler, so to speak. To this end, it’s absolutely crucial to balance the two lifecycles, or else you risk shortchanging one for the benefit of the other.

Regardless of your field or industry, your personal financial lifecycle as a serial entrepreneur can be divided into four stages:

  • Early: You are beginning to accumulate wealth while paying down student loans, acquiring assets and taking advantage of business loans.
  • Growth: You are established in your area of expertise but are still working to acquire new skills or connections, continuing to grow your wealth, and working towards short- and long-term financial goals.
  • Mature: You are active in new business ventures other than your own, and protecting your family and business through the right planning strategies.
  • In transition: You are managing a more complex balance sheet with the help of outside advisors, and preparing for a succession plan for your own business while continuing to invest in others’. Plans may include intra-family, intra-company, or selling outright alternatives — all of which have long-term income implications.

Meanwhile, your business has its own stages and growing pains in what’s known as a company financial lifecycle. This, too, can be divided into four stages, and the complexity of your business’s balance sheet at each of the different stages drives different needs:

  • Start-up: Your business is working to acquire capital, make a name for itself in an industry, create or try out product or service offerings, and recruit quality talent (if your business model uses employees). Your business may have little liquid assets.
  • Growth: Your business has traction but still needs to differentiate itself from competitors, acquire new clients, and increase assets. Your business may still have little liquid assets, as most capital is going into growth.
  • Mature: Your business is established in its industry, has a steady stream of clients and income, but growth may be more challenging.
  • In transition: As owner/creator, you are planning for the next stage of business or venture. Your succession planning/exit strategy also has become a high priority.

Looking at the above lifecycles, you and your new business may be at different stages at the same time. For example, if you are transitioning from an existing business venture to a new one, you may be established in your career and already have a complex balance sheet, making you at the growth stage of your personal financial lifecycle. However, since you are starting something new, your venture will be at the early stage of its company financial lifecycle.

The disparity between these two stages may compel you to make the difficult decision of whether to prioritize your personal goals or business goals. For instance, as a mature professional, you may have a large portion of your personal assets tied up in long-term investments, thus fulfilling your need to save for retirement. Yet your new venture will need capital to pay for employees, create and test out products and services, and make its name well known in the industry. Do you take money out of your investments – and potentially risk your retirement savings – in order to have the liquidity that your new business needs? That’s a decision that you shouldn’t make alone, which is why you may need a wealth manager who is familiar with the needs of serial entrepreneurs.

Both your personal and business financial lifecycles must be considered when evaluating and setting your needs and priorities. Otherwise, you may be fulfilling your growing business’s needs for capital and unintentionally hindering your personal goals. For example, questions worth considering might be: Do you have a “back-up” plan in place in the form of protection solutions? Are your new articles of incorporation/LLC documents in line with your current estate and philanthropic plans?

Like most serial entrepreneurs, your personal and business lifestyles won’t be on the same page. But that doesn’t mean they have to be in conflict with each other. Sure, it will feel like a balancing act sometimes, but that may be a skill you’ve already developed.


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Investment Insights: Apple takes a bite out of earnings

Wade Balliet
Posted by Wade Balliet
Investment Strategy
Street view of Apple store in China, with a crowd of shoppers inside visible behind the glass wall.

Although Apple may have disappointed some investors, companies within the S&P 500 in aggregate have held up to the hype placed on the domestic equity market this year.

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ESG: Keeping an eye on the governors

Steve Prostano
Family Wealth Advisors
View from hilltop with a few wind turbines, with other hilltops visible in the distance.

Investing in companies with a positive ESG reputation could be particularly important during times of economic uncertainty or social unrest.

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Millennials share their financial literacy lessons

Paul Appleton
Consumer Banking
Young woman on an empty city street checking the cash in her wallet.

Their insights may give us all some useful guidance for helping future generations to learn.

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SRI: Investing and feeling good about it

Steve Prostano
Family Wealth Advisors
Young, bearded man in a business suit discussing plans with an African American female colleague holding a tablet.

This blog post is part of a year-long series that examines key concepts in our glossary of philanthropy services terms. Socially responsible investing (SRI) – also known as sustainable investing, as well as socially conscious, green, or ethical investing — encompasses any investment strategy which seeks both financial return and positive social outcome. SRI is […]

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