Podcast: Wealth Management Strategies for Entrepreneurs Who Sold Their Business

By Noah Rosenfarb
Published: November 21, 2016 | Last updated: March 20, 2024
Key Takeaways

Eighty percent of people with wealth in excess of $5 million gain it through entrepreneurship. Learn about wealth management strategies from Richard C. Wilson, a leading professional in the area of family offices for the ultra-wealthy.


In this session you will learn about:

  • Positioning your company to be a strategic acquisition;
  • Wealth management strategies of the ultra affluent;
  • The differences and benefits of a single vs. multi-family office; and
  • Tips for finding credible advisors to manage your money after the sale of a business.

About the Guest

Richard C. Wilson is a bestselling author and global speaker who works with family offices, the ultra-wealthy, and large hedge fund and private equity fund managers. He is the founder of the 40,000-member family office association called the Family Offices Group, and the 85,000-member Hedge Fund Group (HFG). Richard is CEO and founder of Richard Wilson Capital Partners, LLC where he works to connect family offices with best-of-breed fund managers. Much of Richard’s writing attempts to remove the secrecy and lack of clear information within the areas of family offices, capital raising and hedge funds.

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Read the Full Transcript Here:

Noah Rosenfarb: Thanks for joining the Exit Strategy Simplified blog and podcast. Here’s today is Richard C. Wilson, founder of the 49,000-member Family Office Group and author of the Family Office Book: Investing Capital for the Ultra Affluent. Richard, thanks so much for joining us today. I want to jump right into it and ask you to tell our listeners based on our experience, what’s the one thing any owner can start doing right now to prepare for an exit?


Richard C. Wilson: I think the one thing you need to do is really position your company to be a strategic acquisition instead of a kind of commodity revenue acquisition. The difference is that if somebody looked to acquire your business, take it over and merge with you they’re either going to look at your revenue and just do the math and just say, “Well, I want to pay up in three, five or seven years and give you an offer for that amount,” or if you can be a strategic addition to their business and give them access to a new market, help their branding, position them, get them more leads everyday for their business, then you might be worth far more than what your revenue is.

I think that you need to think about your own business and your own industry and think about how you can build systems, processes, positioning, unique assets, barriers to entry, so that your competitors will see you as a strategic acquisition instead of just kind of a revenue multiplier type opportunity.


Noah Rosenfarb: That’s a great answer. In your experience, have you seen any companies that have done this incredibly well?

Richard C. Wilson: I can’t think of a great example off the top of my head, but this actually came up because there’s a publicly traded media company that has approached us about buying our training and association division and then we told them ‘no’ and they came back to us and they said, “Well, can we buy a part of it and partner with you?” Then I started reading a lot of books on how to sell your business and how to position your business to sell, and it just came up again and again. It was in every book I read that was written by experts in the field that you need to position yourself strategically.

I think a good example is a if you are in a small niche industry and you have, say, a newsletter or a magazine that your company operates and it’s the number one or a top three publication in that industry, maybe it only produces $5,000 a month for your business but that branding might be worth quite a lot to a larger industry player, so that’s a good, I think, example of how you can get bought out by somebody for more than worth in terms of just revenue.

Noah Rosenfarb: That’s such a great advice and great suggestion. When you’re working with families and the families that you see, what would you say are some of the strategies that they’re using to minimize taxes?

Richard C. Wilson: Well, my answer here is not going to be quite as, you know, as valuable as my other answers just because I pretty much defer all my decisions to my CPA and he guides me in my specific situations. When I work with ultra-wealthy families, I see them using real estate structures and rolling things over, doing things within the side – foundations or trusts – basically a lot of them might live in a different state six months in one day out of the year. Obviously, you have to consult with your adviser in your specific situation on what’s going to work for you.

But really, I think that what’s interesting when I last worked with the ultra-wealthy is that a lot of them actually pay a lot more attention to protecting their principal and protecting their capital and they try to make things tax-efficient after their plan is in place. They don’t let taxes kind of guide their whole plan. It gets kind of interesting in something that is a little bit counter-intuitive and I didn’t think that was the case maybe five or seven years ago.

Noah Rosenfarb: But after protecting principal and preserving capital, I agree real estate, foundations, trusts, managing your residency, all those are great ways to minimize taxes when used appropriately.

One of the things that I’m sure you help guide families with is looking for a money person, someone they can trust with some allocation of their capital. Maybe you could tell our listeners, what’s a good process to go through to vet people and, questions to ask or things to look for?

Richard C. Wilson: Sure. I think you’re looking for somebody with integrity, someone who is a hard worker and doesn’t seem to slip when you meet with them, somebody that, you know, you feel that gut level, you feel like you can trust and has a high degree of character. But I think that one of the quickest ways to assess whether somebody has all those things is just to look at how they structure their business and their life and how they structure their time everyday and whether they do everything with the long-term in mind, or whether they take shortcuts everywhere and don’t invest in their own business and don’t grow their team and grow themselves for the long-term. I think that being long term minded is something that only people who are dedicated to their industry in serving their clients will really do, and people who are just in the game for the short term, kind of make a quick dollar, don’t really know what they’re doing that well and they keep looking for shortcuts.

Noah Rosenfarb: That’s a great easy way to evaluate that. Anything to add to that? Any stories that you’ve heard or anything you could share about people that either how they identified someone that was right or how they ended up identifying someone that was wrong?

Richard C. Wilson: Yeah. We came across somebody a few months ago who had an opportunity working with a global wealthy family and it seemed like a combination of possibly too good to be true and some of the details just didn’t seem to line up. Something gut life told me this person was not someone who I wanted to work with. When I told them that I didn’t want to work them, they got really upset and sent over a mad email that it wouldn’t work with their family because it just wasn’t a good fit for our business model, and in those emails it just became really obvious that a lot of things they told us before weren’t true at all, you know, the amount of assets they had, the investment types they had, etcetera and it could have got us into probably compliance trouble if I had agreed to work with them and had them as a client. It could have gotten me into some compliance hot water. Sometimes you have to trust your gut and you do background checks and you do due diligence. If it just doesn’t feel right there are millions of clients you can work with and you don’t have time to work with everybody anyway so you might as well not work with somebody if you’re not sure about them.

Noah Rosenfarb: Good advice as well. In the wealth management business and in the families that are looking for advice, I find that it’s incredibly confusing for the average consumer to differentiate broker’s firms and registered investment adviser firms and family offices and multi-family office and all the different people out there that are advising clients about their investments. Can you walk us through that process and maybe underscore some of the distinctions between the different people out there that are looking to help affluent families?

Richard C. Wilson: Sure. Who is best for someone’s individual situation will change based on your types of investments, where you are in the world, what your investment goals are, but just some quick definitions. Broker’s firm typically offers either direct trading on your behalf and the equities and bonds or access mutual funds, ETFs, available annuities, etcetera. An RIA [Registered Investment Advisor] typically – instead of making money off of individual transactions buying and selling things – an RIA typically is a bit more independent. They might be tied to one, two or three investment platforms that have products on them, but they can pretty much get access to the products you request in most cases, and typically they just charge a flat fee at the percentage of your assets instead of charging you on a transaction basis. That’s typically where people are going nowadays.

Now, there’s a topic that’s gotten much more popular and it’s something I focus on every single day and that is family office wealth management. Family offices really help be your kind of CFO for your family or for you individually and they manage your full balance sheets, financial situations. An RIA might just help you with your investments whereas Family Office can provide a more holistic overview and maybe they’ll help you with your insurance needs, with chartable giving, with multi-generational transfer of wealth. Generally, if you have $10 million plus, and especially if you have $20 million plus, you should probably be considering the Family Office and at least research on the topic. It’s really a growing business model so I think in the future we’re going to see many more family offices out there advising clients than we do right now.

Noah Rosenfarb: What about the distinction between the multifamily office and the standalone family office? Can you identify those distinctions also?

Richard C. Wilson: Yes. A single-family office is a group which is set up for one individual or one family and so everybody on the team there is just looking out for those family’s investments, assets, insurance, everything related to their financial picture, and everything is crafted custom for them. A multifamily office is much, much less expensive. If the single family office you have to have typically $30 to $50 million as a bare minimum and many times $100 million to do it right, in a multi-family office if you have $10 or $20 million you can generally be accepted as a client, and in a multi-family office there’s one core team but they’re serving 4 families, 12 families, sometimes as many as 50 or 100 plus families.

Inside a multi-family office they customize your investment solution and they customize everything they do for you but the team is trying to leverage the fact that they’re doing research on hedge fund managers and real estate investment opportunities and ETFs on behalf of all of the different clients, so every multi-family office will have different areas that they have strengths in, weaknesses in, and they will have to serve multiple clients. They’re not all there in the office to answer your phone calls and do research for you, you know, around the clock and answer to you maybe as fast as with the single family office – it’s dedicated to you – but it can be a huge step-up and service from a wealth management firm which is really kind of siloed service and not as holistic or complete in terms of what they can do for you.

Noah Rosenfarb: Have you found in your experience that once you qualify for the multi-family office category or the single family office category, that those are generally the best fit or does sometimes it makes sense to have a brokerage firm or kind of a plain vanilla registered investment advisory firm still working with the family?

Richard C. Wilson: I guess it depends on what you need and what you like. If you have some investment knowledge and you’re managing some of your investments on your own, you might just simply need brokerage firm or RIA. Some firms just call themselves a wealth management firm or RIA. In fact, they offer all the same services as a family office. It’s just the title that you can give yourself if you’re a wealth management firm and you think you’re offering a really complete solution. There’s a lot of confusion over who’s a family office, who’s not. Some people that have been in the industry a really long time will say the only family offices are single family offices, but the reality is there are thousands of firms out there calling themselves multi-family offices. They can’t deny the reality that that part of the industry exists and it’s thriving right now.

So, really, spend time with your investment picture where most of the time, you know, one of the core benefits of using a multi-family office is that all of your financial things are managed under one roof so you don’t want to be over-insured or under-insured. You don’t want to forget to put away money each year for your kids for when you pass away. Sometimes, when things are managed by different people things can fall through the cracks. I just spoke with a CPA in Dallas yesterday who advises ultra-wealthy clients, and he said one person came to them after selling their business and they ended up with a seven-figure tax bill that could have been almost completely avoided if they had met with them before the transaction. Possibly if they had been working with a family office early enough it could have avoided $500,000 or $800,000 worth of taxes that they paid just because they didn’t have the right structure set up. That is why sometimes paying a little bit more in fees can more than pay for itself, you know, in working with a multi-family office.

Noah Rosenfarb: In flushing out the multi-family office model and when consumers are out there looking, you know, people that probably are either selling their business or th inking about selling their business and now they’re going to be in a position to work with a multi-family office, what’s the interview process like theirs? Is it going to be similar to just trusting your gut and making sure that that person has a long-term business or there’s some specific steps they can take?

Richard C. Wilson: I’ve written about this quite a bit in the book I just released called The Family Office Book: Investing Capital for the Ultra Affluent. I believe it’s chapter five in that book where I go over basically all the advice I have on selecting a family office, but really you need to see what the strength of that family office is and what your investment priorities are. You need to see how many people they have on their team – is it one person or is it fifty people. You need to see who you’ll be coordinating with day to day and make sure you get along with them – do they rush you out of meetings, are they impatient with you. They should really listen to you carefully, and things need to be crafted sort of custom to your situation. If you feel like somebody’s impatient, rushed, has a short temper and it’s going to be hard to deal with, you don’t need that extra stress in your life. Chances are, if you’re ultra wealthy you’re probably working 60 or 80 hours a week or you have a lot of responsibilities. The last thing you need is another headache in your life. Your multi-family office should be relieving a lot of headaches. I think that would be my best suggestions on making sure you join the right group.

Noah Rosenfarb: Kind of coincident with that or maybe it’s for the same interview process, unfortunately when people accumulate wealth they become a target and ponzi schemes and scammers that are out there. What are your suggestions for trying to avoid those types of people?

Richard C. Wilson: I just think you should simply ask them for three references of people that have been with the multi-family office for three years or more, and if they can provide you three references, and you don’t want to be the first client that stays with them for three years or more. Speak to all three of those people and do your normal kind of due diligence that you do before hiring a firm. I think that extra step of asking for those references will help guard you against brand-new multi-family offices that don’t know what they’re doing yet.

Noah Rosenfarb: How about switching it over and talking about the impact of wealth on families. Unfortunately, I think a lot of people I’ve interacted with, they have a concern that money can be negative, a negative thing for their family. Do you have any advice for families that feel like they’re facing that same issue and problem in their life?

Richard C. Wilson: Is it normal that people that already have money see it as negative or people who are just thinking about getting more money, in your experience?

Noah Rosenfarb: In my experience, it’s the liquidity. Now there’s going to be a liquidity event and as a result there’s a pile of cash as opposed to a stream of income and, you know, the entitlement issues start creeping up and who’s going to be entitled and how do they whack it up and do they want to payment now or later?

Richard C. Wilson: I think it’s definitely bad when kids get access to money too quickly or even know that the family has too much money. I might just get a bit too relaxed and too complacent with the opportunities they have in life. A lot of wealthy families have a next generation of kids who don’t work hard, don’t push themselves, don’t develop themselves and they blow all the money and it’s gone within another generation. That happens all of the time. I think money can be a great thing. I don’t think it’s a negative thing. People say money can’t buy happiness. I kind of disagree. If you like going to the beach and you’re able to go to the beach more often because you have enough money to pay someone to do some menial task or help manage your estate, you just bought yourself some happiness by going to the beach more often.

Definitely, I don’t think it’s all a negative thing. Obviously, there are some real upsides of having money. But I think that one thing that happens is that families come and do a lot of cash but they’re not sure what to do with it. It takes them three to five years to allocate it once they come with the money, and during that time their bank accounts can feel large to everybody around them and so with that money sitting there it feels like you have a lot of extra money so this gets spent a lot of faster. If you come up with an investment budget and come up your allocations and allocate $10 million and put it in a different private bank account or put it with a wealth management firm, just getting that money moved out of just, you know, your general checking accounts and money market accounts alone will help you avoid some spending mistakes I think some people make when they first come in the money.

I think, luckily a lot of people I know who have become ultra wealthy did so by moving up the ladder step by step. Some of them sold business and then suddenly came into a lot of wealth, but many of them get to that point where they sold a business for $20 or $30 million who are making half a million or a million dollars a year and they realize the hard work it takes to come into money. I think that’s much different if you inherit the money. They say people who win the lottery often end up in debt more so than before they won the lottery, later on in life. I think that it’s always best if you earn your right to come into the money rather than coming to it all of a sudden, whether you’re structuring that for your kids or choosing a payout structure for yourself. I think it’s a learning process to learn how to manage having a lot of money, I think.

Noah Rosenfarb: In that theme, trying to build a long-lasting and positive legacy, what are some of the things you think owners should be thinking about in influencing their kids and their grandkids with?

Richard C. Wilson: Well, besides some people that inherit money I really don’t know anyone who became ultra wealthy by being lucky. I guess people who win the lottery – and I’ve never met someone who’s won the lottery – but I think in general society people either think something negative or something unfortunate about someone who has a lot of money. If you saw someone pull up in a Ferrari you’re like, “Wow, look at that rich jerk, so lucky.” You see somebody in a yacht you just think, “Wow, what a lucky guy.” But really it has almost nothing to do with being nice or mean. It has nothing to do with being lucky at all. It has to do with a lot of hard focus and work and advantages, you know, opportunities taken advantage of.

I think that it’s really important that you tell the family story because otherwise people will assume that grandpa got lucky or he was a rich jerk. I think that you need to tell your family story within a book, within some sort of memoir or memo within some sort of, even if it’s just a ten-page write-up of the family history. I think the story needs to be told through the generations or people will just assume, soon they’ll become distant from what really happened and the stories will trail off in the next generation and they won’t appreciate the hard work you left behind earning that money.

Noah Rosenfarb: We just had Dr. Judith Kolva on as a guest and she talked at length about telling the family story because she’s a personal historian who writes memoirs and it’s interesting to hear how stories just get lost over time and without them being written or narrated or recorded in some way. They have a tendency to just disappear, so that’s great advice.

Richard C. Wilson: Right. Obviously, I’ve never sold a business for $100 million etcetera so I wouldn’t consider myself ultra wealthy but my daughter is here now. I’ve got one daughter and I have to think for myself too, how do I communicate our family story and my parents’ story to her when she grows up, and I’m glad that someone else mentioned that. I think it’s something that’s pretty important.

Noah Rosenfarb: Well, in your experience I’d like for our listeners to hear some stories. Maybe they could either identify with them or perhaps take a different path from what they hear. Oftentimes, owners don’t make difficult decisions because they’re concerned about the consequences and then later on they realize that that was short-sited, like they won’t terminate a non-producing family member because they don’t want to fall out from their spouse or their daughter-in-law or son-in-law, but then at the end of the day they realize, “Oh, it probably would have been better off had I let them go out of the business. Do you have any stories like that that you could share where people might be able to learn a lesson?

Richard C. Wilson: I think that sometimes in a medium-sized business it just gets exhausting running everything and it’s come to this breaking point of either you need to build up the infrastructure, you need to build up your marketing or you just kind of sell out at a very poor return on your money to a national firm or just start go working for someone else. I think a lot of businesses get to that point and I would just encourage someone to run in a business to use the infrastructure that’s available nowadays through websites like or through hiring a part-time bookkeeper or CPA and just through self-education and really push forward to grow their business. I think some people just kind of give up maybe right before they would have become really successful, and after a lot of hard work they just kind of fold their company into a national firm and provide all that branding and hard work they’ve done to position themselves to this other company now that hasn’t really paid for that. I’ve definitely seen that mistake happen a few times.

Noah Rosenfarb: Yeah, and I think there are some studies about you know, people tend to just give up right before they’re about to hit the tipping point of success. That’s where you get tested most. What about if it’s other way around? Any positive stories about owners that did make difficult decisions and lived to see the benefits of that work?

Richard C. Wilson: Yeah. I know one ultra wealthy family that’s living in, I think it was California or some state with a moderate income tax, in this total state tax situation. They almost moved their business to Nevada just to lower their taxes. I think that they basically when assessing what their actual family goals are and their family values, they realized that not everything is about lowering their tax rate and maximizing their profits. They wanted to have a closely knit family and they wanted to stay close to all their personal relationships, and so part of this gets into when they’re talking about serving the family, an ultra wealthy family, a lot of it comes down to family dynamics and politics and family preferences and values and the family mission. A lot of it comes down to the non-financial things, which then directly affects financial decisions, your way of business or where a family is based.

I think that everything has turned out well for that family and I think they’re really smart to look at things from a non-financial perspective not just shop a decision down the totem pole and just tell everybody that they’re moving because they want to lower their tax rate. I think that was wiser that they considered other factors and I think that the best multi-family offices will start with an overview of what the family is trying to accomplish, what’s important to the family and just make sure that all that fits into the solution that they are provided.

Noah Rosenfarb: That’s great. My firm, we run a multi-family office and we define prosperity as equal parts of happiness and currencies and I think that falls right in line with what you’re saying. It’s one thing if we could generate a better after-tax return but if it’s at the expense of some happiness we have to reevaluate.

Richard C. Wilson: For sure.

Noah Rosenfarb: What else do you think you’d like to share with our listeners that might be contemplating the sale of their business and thinking about what their next steps are, their financial plans and their personal plans?

Richard C. Wilson: I guess my last tip would just be to do a thorough job or curating competition around the sale of your business. Prices of everything go up when other people think it’s scarce, when other people are competing for a single resource, so besides positioning your business as a strategic acquisition make sure that you build out a spreadsheet of the top 10 or 20 companies that might want to acquire you, contact details of a couple of executives of each of those firms. Go meet with them in person two, three, four times and create almost like an auction type situation around your business. That will really drive up the multiple and you can play among each other and say, “Well, we have two standing offers. We just want to meet with you real quick just to make sure that we would be a fit with your business because we want to make sure we’re sold to someone who would really carry this business forward since we spent so many years building it.” I think if you can create some competition around the sale then you’ll protect the price you’re asking for or maybe raise it.

Noah Rosenfarb: Sounds good. If our listeners had an interest in joining the family office group or they want to get a hold of you for some of your advice and counsel, what’s the best way for them to get in touch with you?

Richard C. Wilson: The best way would be to go to my website at and there would be lots of free videos and free report they can download. My email address is on there, which is [email protected]. I encourage them to also get a copy of my book. It’s on Amazon. It’s only about 28 bucks so it’s cheap. We spent about 400 hours putting it together and the book’s called The Family Office Book: Investing Capital for the Ultra Affluent.

Noah Rosenfarb: Great. Well, I want to thank you, Richard C. Wilson, a great guest for today, lots of knowledge about family offices. Thanks so much for taking the time out to share your knowledge with us.

Richard C. Wilson: Sure. Anytime, Noah. Thanks for your time.

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Written by Noah Rosenfarb

Noah Rosenfarb
Noah Rosenfarb, CPA/ABV/PFS has devoted his career to advising business owners on all things related to money. He is a Personal CFO and Holistic Wealth Coach at Freedom Business Advisors, which provides middle market business owners guidance on how to successfully transition out of the management and or ownership of their company. Mr. Rosenfarb is the author of EXIT: Healthy, Wealthy and Wise.

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