Liquidity and Growth Strategies for Entrepreneurs

Unlocking Capital to Fuel
Business Growth

Entrepreneurs often face a paradox. Their wealth is tied up in an illiquid business, yet they need liquidity to diversify and protect their personal financial life. The right strategies create balance between business reinvestment and personal financial security.

1. Diversify Without Sacrificing Growth

Liquidity does not mean walking away from growth.

Educational Takeaways:

  • Partial liquidity events such as minority sales or recapitalizations allow owners to secure wealth while retaining upside.
  • Stock option or phantom equity structures align employees while providing owner liquidity.

2. Tax Efficient Liquidity Solutions

Liquidity strategies should minimize tax impact.

Educational Takeaways:

  • Installment sales can defer recognition of gains.
  • Opportunity zone investments can provide deferral and exclusion of capital gains.
  • Charitable strategies such as donor advised funds or charitable trusts can enhance efficiency.

3. Protect and Grow Personal Wealth

Once liquidity is created, it must be safeguarded.

Educational Takeaways:

  • Diversified portfolios reduce reliance on the business.
  • Alternative investments can provide uncorrelated returns.
  • Trusts, insurance, and entity structures protect against liability.

Conclusion

Entrepreneurs can achieve both liquidity and growth with thoughtful planning. Balancing reinvestment and personal security is not either or—it can be both.

Preserve Your Legacy

Explore liquidity strategies tailored for entrepreneurs through LeClair’s integrated approach.