The evolution of a business—from initial concept, to thriving enterprise and finally an eventual exit for the founder—is a long-term process and involves a meaningful investment today in pursuit of large rewards tomorrow.

Likewise, the evolution of an entrepreneur’s financial strategy requires serious attention today, in order to achieve results tomorrow. Of course, time is the most precious of resources for most entrepreneurs, and many simply do not have the bandwidth to focus on anything other than their current venture. Thus, we build our relationships with entrepreneurs on a simple principle: We seek to deliver results without requiring them to shift focus from their business. We are committed to investing in each individual founder and builder, and consequently, devoting our time to help them on their entrepreneurial journey.

Managing Assets, Preserving Time

Entrepreneurs may find it odd—or even superstitiously dangerous!—to focus heavily on personal planning for a liquidity event that may not come to fruition (and won’t occur for several years if it does). However, early attention to these matters can pay off tremendously down the road when an entrepreneur is ready to exit.

Business transition planning is art as much as it is science. It is designed to let entrepreneurs accomplish their business and personal goals by resolving known and unknown problems unique to their situations. This type of planning often encompasses many planning disciplines, such as financial, estate, investment, business, contingency, succession and tax. Brown Advisory has a great deal of experience helping entrepreneurs develop long-term investment strategies. These often intersect and complement their plans for their businesses.

As noted, a core aspect of our approach is respect for the entrepreneur’s time. Throughout the business growth cycle, from startup to exit, we concentrate our engagement on a limited set of focused activity periods, each one targeting key moments in the evolution of the clients’ business. During these activity periods, we lay out options and choices clearly for our clients, so they can quickly make important decisions—and get back to work.

This process is similar to the “phase-gate” process used in many product development cycles. It is fairly straightforward:

  • Discovery. We do a deep (but efficient) dive into the founder’s financial circumstances and business dynamics, so we can craft an appropriate long-term approach to the relationship.
  • Phase-gate planning. We craft a process that involves a finite number of concise meetings over the projected growth cycle of the founder’s business. Each phase or meeting is designed to identify, analyze and resolve known and unknown problems that entrepreneurs may encounter during a business transition. These meetings are roughly planned out in advance, to coincide with the key decision moments that the founder will likely face based on the initial business plan— projected funding rounds, the projected transition point from “cash burn” to “cash flow,” etc.
    • We meet with the founder for conversations at these identified milestone moments. We prepare carefully for these meetings, so we can lay out essential information and make it as clear as possible to the founder what decisions are needed to move forward.
    • In between these meetings, the client can focus on the business, and we take care of driving all of the investment and planning work.
  • Preparation for exit and beyond. As we get closer to a liquidity event, meetings are likely to be more frequent as we prepare for the coordination of wealth generated by that liquidity event. For example, if the founder anticipates a liquidity event in three-to-five years, we could build a process that involved only four or five meetings in total, to coincide with one or two funding rounds, and then a string of meetings in the months before a planned exit.


A great financial strategy for entrepreneurs requires an investment of time and energy today, in order to achieve results tomorrow.

SOURCE: Brown Advisory

The “Planning J-Curve”

Entrepreneurs and private investors often refer to the “J-curve” of young businesses, where time and money are sunk into a venture upfront (the bottom of the “J”), in order to reap payoff years later (the top of the “J”). Our aim is to provide tailored advice to clients that is highly relevant at each phase of the business’ development, and to help them focus on the key planning decisions required at each phase.

  • Startup. At the onset, we focus attention on business structure and governance, reserve planning, insurance and asset protection. Concurrently, we can help build an advisory ecosystem to assist entrepreneurs with a wide range of services. We find increasingly that entrepreneurs can benefit by starting their exit planning even before they form their business entity. The choice of business structure can have a lasting impact on the tax treatment of a liquidity event, issues regarding succession, and many other important factors.
  • Build / Grow. At this stage, we work to enhance cash management and risk diversification of a client’s assets. Tax and estate planning considerations are important during this stage; for example, we work with many clients to create trusts to hold business interests in a manner that will serve them well down the road. We also work with clients on best practices to support an eventual exit valuation of the enterprise.
  • Exit. Deal execution marks this stage. At this juncture, a good deal of attention is focused on stakeholder care—namely support of employees, family, etc. Concurrently, we work on tax matters, coordination with bankers and other parties connected to the liquidity event, and tax and estate plan implementation.
  • Post-Liquidity. The post-liquidity stage of our work with entrepreneurs looks more like our traditional private client relationships, with a focus on ongoing investment management and pursuit of family and legacy goals, such as generational transfer of assets, philanthropy and potentially the start of a new business venture and a new planning cycle. We find this is also an optimal time to restructure insurance and asset protection needs.

How We Can Help

Investment and financial strategy are critical for those who choose to create their own businesses. We understand that it can take a few years for the trajectory of a new business to become clear. Until that point, it can be very challenging for entrepreneurs to construct, maintain and monitor a plan to meet their financial and personal goals, given that they are fully absorbed in building their new enterprise. We have developed a philosophy, process and practice at Brown Advisory to help entrepreneurs translate business success into attainment of personal financial goals, while preserving their most precious resource—time.





The views expressed are those of Brown Advisory as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be and should not be relied upon as investment advice and are not intended to be a forecast of future events or a guarantee of future results. Past performance is not a guarantee of future performance and you may not get back the amount invested.

The information provided in this material is not intended to be and should not be considered to be a recommendation or suggestion to engage in or refrain from a particular course of action or to make or hold a particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. To the extent specific securities are mentioned, they have been selected by the author on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients. The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy, and is not a complete summary or statement of all available data. This piece is intended solely for our clients and prospective clients, is for informational purposes only, and is not individually tailored for or directed to any particular client or prospective client.