More than 60 Boston-area companies have been acquired in the last 18 months, most of them privately held. When you sell your company, it’s not just a life-changing liquidity event, it’s validation of your business model and a hard-earned reward for your ideas and long hours.
In the big deal, you’ll receive cash, stock and possibly incentives to continue working. Then what? Based on my 30 years of experience working with fortunate business sellers, here is a checklist to guide you.
Investigate, assess and appraise
With more liquid investment assets post-sale, you may be, ironically, at more risk. It’s important to purposefully get your arms completely around your financial future. If you already use a discretionary investment advisor, now is a good time to revisit why you chose that person and assess whether they are a good fit going forward. Are they now outside their range of experience and expertise? Examine whether their fees still make sense given the size of your account.
If you have never used a discretionary investment manager, now may be the time. As you probably found in building your business, specialized expertise can make all the difference. At what level will/should you stop doing it yourself, or doing it haphazardly? $1M? $10M? $100M? Only you know. See What’s your TWA rating? for perspective on this decision.
Redo, re-run and rethink
Many people spend more time shopping for appliances than they do choosing an investment advisor. We suggest the opposite. Talk to multiple advisors, looking for both expertise and a personal connection. Our article 5 Ways to Compare Investment Advisors will help. These five metrics will quickly reveal important differences between the brand name product push, broker-dealer types (Merrill, Goldman, UBS) and registered investment advisors (like Osbon Capital). Based on your takeover publicity, you’ll probably get many unsolicited offers to meet. Accept a few meetings, for fun and education.
Refresh and relax
Now is the time to assemble, direct and coordinate your wealth trinity – investment advisor, tax expert, and trust expert. Maybe an insurance provider is called for. Consider these steps:
- Plan for the future you want, including tax impact – how much do I pay and why?
- Update wills, perhaps create trusts
- Revisit titling of accounts, individual, joint, powers of attorney, beneficiaries, IRAs, 401ks, HSAs, and so on. Now is the time to plan for spouses, companions, family members, charities, and you.
- Transfer risk through insurance planning until you have all the money you need and want
- Check out 3 Steps That Simplify Your Investment Life for a useful checklist
Keep it simple
It’s easy to be overwhelmed by the many changes in your business and personal life triggered by an acquisition, not the least of which is the sudden appearance of liquid money where once there was just a piece of paper and anticipation. Don’t feel that you must make your financial life more complicated just because the dollar figures are larger. You may actually be able to reduce the number of accounts you hold and track all performance in one place, which you can do on the Osbon portal.
You have plenty of time to figure it all out. Listen to yourself, listen to others and use your best judgment. That’s how you got here in the first place.
Bonus: Embrace “Mindfulness” and “Awareness”
At times of stress, both bad and good, these 21st Century advances beyond meditation can provide insight and contentment. And they’ve become much more accessible to the individual in multiple media. Visit the guy who started it all, Jon Kabat-Zinn, at his website for a user-friendly introduction.
– John Osbon
Research shows that only 1/3 of investors are currently comfortable with their investment portfolios. If you’re interested in a free performance review, click here.
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