Case study: planning for liquidity and legacy: a technology entrepeneur's journey

Planning for liquidity and legacy: a technology entrepreneur’s journey

We recently worked with a 40-year-old technology entrepreneur who was scaling up their company and exploring a secondary exit.

Married with two children, they held a majority shareholding and voting rights in the company, but all their wealth was tied up in the business. Their goal was to de-risk personally while continuing to grow the business with the right partner.

Making a pre-exit plan

We began working with the client well before the transaction, helping them clarify what a liquidity event could achieve – not just for their company, but for their personal life.

While they had strong legal and tax support, this was the first time they had stepped back to think about long-term planning. First, we modelled a range of exit scenarios to assess how much capital might be needed to support their lifestyle. We then introduced a trusted accountant and lawyer to help build out their advisory team.

In parallel, our Global Advisory colleagues supported the next phase of business growth. This ultimately led to a successful minority stake sale, enabling the client to take £20 million off the table, giving them room to focus on the business without the personal financial pressure they had previously felt.

Looking ahead

As part of the planning, we looked at ways to structure their finances with the future in mind. The client chose to set up a trust to hold part of their equity for the benefit of their children.

We also opened new wealth management accounts, both for the trust and for the client personally, replacing a student bank account they had used since university.

Post-exit lifestyle and investing

Following the sale, the client upgraded their family home and purchased a chalet in the Alps. They retained cash to cover their tax bill, set aside a 2–3 year spending buffer, and reserved funds for planned angel investments.

A further £8 million was earmarked for a long-term investment portfolio – their personal 'nest egg' – designed to support their family's lifestyle for decades to come. Later, a Lombard lending facility was added, allowing them to make ad-hoc seed investments without disrupting their core portfolio.

Having stepped into a chair role, the client is now preparing for their next venture. As is often the case with entrepreneurs – they rarely retire, they just shift gears.

For the planning for liquidity case study, the assumptions are below:

• £8.0m invested in a GIA
• £1.0m invested within the Trust
• £40k invested in ISAs and then £40k p.a. contributions
• £5.0m tax bill paid in year 1  
• £1.5m held as a cash buffer to cover expenditure and any VC opportunities
• £250k p.a. (inflation linked) of cashflow derived from the GIA

_{Source: Rothschild & Co, Bloomberg Data from 31 December 2002 to 31 December 2024.}

_{The New Court Fund GBP inception date was 14 July 2015. Performance for periods prior to inception date is the Rothschild & Co Wealth Management UK Ltd GBP Balanced composite, adjusted to reflect the fund's 1% annual management charge and 0.06% operational costs. Performance data is net of fees. Data post 30 September 2007 is net of actual client fees incurred. Data prior is actual gross performance less current average client fees.}

_{Past performance is not a reliable indicator of future performance and the value of investments and the income from them can fall as well as rise.}

_{The above graphs are for illustrative purposes only. The information above is not intended and should not be construed as tax advice. Each investor should seek their own independent tax advice}