Case Study: Software Company Takes on Strategic Investor - Planning for Liquidity Events


Two serial entrepreneurs working to build a niche software business. Each is married with children, looking to support their children’s interests, achieve financial freedom, and mitigate entrepreneur’s risk.

How Did We Help?

During initial discussions, we learned that their company did not have a 401(k) retirement plan in place to provide tax-deferred and diversified growth opportunities.  They recognized that they were also missing out on an opportunity to provide an incentive to valuable employees they were seeking to recruit/retain.

As a result of our work helping their company establish a defined contribution plan, one of the partners approached us about helping he and his family in building a financial safety-net that would serve to protect his family’s wealth.  Entrepreneurs often have inherit risk in their business ventures as their wealth and income are tied to the same high risk entities.

Our planning process always includes both partners of a marriage to ensure that that all parties are heard and have equal opportunity to participate in discussions, education and goal planning.  We are also able to serve an objective, third-party facilitator to a conversation which may not yet have have been fully explored. We are able to discuss the "emotions and the equations" of their goals and plan.

Ultimately both partners (with their spouses) engaged us to help them develop a road-map that would provide the safety-nets and diversification each sought. These included liability protection to preserve their wealth and insurance protection to ensure family needs would be met should either partner prematurely die or become disabled.  It was important to ensure that the company would be able to continue under any of these “life happens” circumstances.

To help create the liquidity to provide these protections, the partners sought and were approached by various third parties to consider an acquisition, partnership, or partial equity position.


  • As business opportunities came forward, we helped vet mergers and acquisition advisors, attorneys, and private equity partners.

  • Following consummation of the software businesses’ strategic partnership with an out-of-state private equity firm, we adapted the clients’ personal financial and business plans.

  • We assisted them in using proceeds from the liquidity event to create a diversified portfolio which was not correlated to the business (reducing concentration risk).

  • In managing their portfolios, we began an aggressive tax-loss harvesting program to help reduce the significant tax impact created by the deal.

  • We assisted in broadly providing resources and assessment following the closure of the deal

    • Their need for more sophisticated banking and accounting resources enabled us to provide references to meet new needs.

    • We introduced an appropriate estate planning firm to create flexible estate plans that would accommodate their newfound wealth and provide flexibility for the anticipated rapid business growth.

    • We completed a detailed review of the client’s insurance portfolio and introduced efficiencies as well as additional asset protection to the family's coverage.

The principals of the software business have gained peace of mind that their families will be in good order regardless of future business success or their ability to continue working.  By serving as the quarterback for their planning needs, we are able to call upon other resource partners to meet the multi-faceted demands of complex planning situations such as theirs.

Post-script: Plans have already changed a couple of times as the partners are now on round three of monetizing their incredibly successful start-up.