The situation
Our client, an industry pioneer in his 40s with a young family, founded and sold his successful B2B digital media company.
He was 12-16 months away from exiting his current company, which was growing fast.
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The goals
- > Transfer a significant portion of the company shares to a family legacy trust for his children
- > Benefit from any tax-mitigation opportunities
- > Generate $1 million in pre-tax income from his post-sale after-tax proceeds
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The approachWe designed a pre-liquidity founder’s plan to help our client achieve his three goals:
- > Worked with our Senior Wealth Strategies to simulate “what if” liquidity scenarios
- > Delivered our client’s Personal Outcome Statement that assessed the likelihood of his achieving his family’s three goals
- through early planning
- > Discussed the pros and cons of the different strategies we presented to help make informed decisions
- > Facilitated our client’s choice to transfer to the family trust a significant portion of his founders shares at a large discount
- to what he believed the ultimate sale valuation would be
- > Recommended the Qualified Small Business Stock (QSBS) planning strategy that helped protect his shares from capital
- gains taxes
- > Presented an investment portfolio designed to achieve his $1 million pretax income goal
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The results
- > The pre-liquidity plan gave our client confidence that he was on track to meet his goals.
- > He was then able to focus 100% on maximizing his company’s EBITDA targets.
- > Discussed the pros and cons of the different strategies we presented to help make informed decisions
- > He sold to a private equity firm for $100 million+ at a favorable valuation.
- > He achieved a significant tax savings and created his family’s legacy trust.
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“
So much time and effort is spent growing the business and preparing for a liquidity event at the business level
that the founder’s personal planning often takes a back seat.
This is unfortunate.”
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We can help ensure you have the strategy you need to exit successfully.
Call us to begin that important conversation. 212-821-7023
