> ## Content Index > Fetch the complete content index at: https://www.capitalfounders.io/llms.txt > Use this file to discover other available public pages before exploring further. # Building Wealth While You're Still Building the Company - URL: https://www.capitalfounders.io/building-wealth-before-the-exit/ - Published: 2026-09-29T08:00:59.000Z - Updated: 2026-09-29T10:26:20.000Z - Description: Most of your wealth sits in one company, and the sale is the move you spend years picturing. Why it's OK to take some money off the table as the business grows, what that does for your risk and your stress, and what two founders got from billion-dollar valuations. - Author: Taras - Tags: Investment Office, Capital Signals Your balance sheet probably has one big line on it, the stake in your company, and a few smaller ones around it. Like most business owners and founders, until there is a liquidity event, most of your wealth is concentrated in your business. This concentration isn't only in your company; it's also in the sector you operate in, and your income usually comes from the same single source. And the same line is illiquid: you can't sell a private company on a Tuesday afternoon because you've decided it's time. Most founders start there, and many stay: 32% of entrepreneurs in [UBS's 2026 report](https://www.ubs.com/global/en/media/display-page-ndp/en-20260311-ubs-global-entrepreneur-report.html?ref=capitalfounders.io) said they hadn't built as much private wealth as they could have. Many founders think they need an exit and to wait for the big paycheck, but as we've seen, that can often ruin them financially, so they can never recover. ## This Week in 30 Seconds - **Wealth before the exit.** Many founders wait for the big paycheck. Taking some money out as the business grows, through a salary, dividends or a small secondary, spreads the risk and takes some of the stress out, and you still own the company. - **What a press valuation is worth.** FanDuel's founders got nothing from a $465m sale of a company once valued at over $1bn. Hopin's founder had already sold about $200m of shares before the business went for $15m. - **My own position.** Still highly concentrated, and I'm considering how to de-risk when the opportunity comes. - **On the Radar.** Citi's family offices bought public stocks and mostly sat still; borrowers are leaving private credit funds for bank loans; three questions for anyone who has put your data into an AI tool. ## Three ways to take money out before the exit Waiting for the final exit and the big number would be the last option; it is still the main goal, though. Many founders, including me, find it pretty tough at the very beginning: you take little money for yourself, reinvest everything, and your concentrated position builds over time. Over time, I think it's okay to diversify a bit. That could mean taking some money out as dividends (at the start it might feel a bit strange) or selling a small stake during one of the fundraising rounds. A salary is the simplest of the three, and the least dramatic. Paying yourself nothing to protect the cap table is the mistake that Jan Voss from Cape May Wealth [warns early-stage founders about](https://capemaywealth.beehiiv.com/p/investing-for-early-stage-entrepreneurs-2365?ref=capitalfounders.io), because if the company fails, you lose both the equity and the savings. When the money starts coming out depends on the business and the situation. To pay dividends, you need to be profitable, and in a growth business that might take some time. So it can be an increased salary (which may not be optimal from a tax perspective), dividends, or taking some money off the table in a secondary round. Jan says he [doesn't know a single founder who regrets a secondary](https://capemaywealth.beehiiv.com/p/investing-for-later-stage-entrepreneurs-25d7?ref=capitalfounders.io), and I wrote in June about [how that first sale works](https://www.capitalfounders.io/founder-secondary-taking-money-off-table/) and why investors tend to read it as discipline. After any of these, you still own the company. The sale is the one that changes that, and it's the one many of us spend years picturing. ## Liquidation preferences: why a $1bn valuation can pay the founder nothing Don't chase valuations, or at least don't get distracted by the numbers you see in the press. Usually you have no idea what the real situation is and what the founders get. A founder might have achieved a $1bn+ valuation for the company but be fully diluted, on terms with investors that leave him with hardly anything meaningful once everyone else gets paid. I suggest you study these stories, even though people don't like to write or talk about them. FanDuel's founders raised $275m in 2015 at a valuation [the press put at over $1bn](https://techcrunch.com/2015/07/14/fanicorn/?ref=capitalfounders.io). In 2018 the company was sold to Paddy Power Betfair for about $465m, and the preferred shares ahead of the founders carried a preference of roughly $543m plus £11.7m, so [the offer document says](https://www.legalsportsreport.com/21742/fanduel-founders-common-shareholders-get-nothing-in-ppb-deal/?ref=capitalfounders.io) nothing was payable on the ordinary shares or the options. The founders are suing the directors, claiming the preferred holders sold that stake on 2 years later for $4.2bn; [a New York court let the case proceed in July](https://www.gamblinginsider.com/news/175362/nigel-eccles-fanduel-lawsuit-survives-dismissal-challenge?ref=capitalfounders.io), and until it's decided, those are allegations, while the preference figures come from the offer document itself. Hopin's founder came out the other way. His company was valued at $7.8bn at its peak, and its events business went to RingCentral in 2023 for $15m up front and up to $50m on performance. By then he had already sold about $200m of his own shares in the 2021 round, [Axios reported](https://www.axios.com/2023/08/12/virtual-meetings-software-flameout?ref=capitalfounders.io), and the $15m sale 2 years later was worth a fraction of that. Neither of them had a number he could rely on until the day it turned into cash. Instead, focus on [the number you need](https://www.capitalfounders.io/how-much-is-enough-for-a-founder/) to reach the lifestyle you want, at least as the first target. If the company changed hands tomorrow at the price of the last round, do you know what would reach you once everyone ahead of you is paid? ## Losing everything on one deal, and what it taught me I experienced first-hand what it means to spend time, money and effort on a venture and then be left with nothing, or worse, owing money, and it can be through no fault of your own. In my previous business, we put together several public-private partnership projects in Crimea, Ukraine: infrastructure, real estate and agriculture. The total value of these deals was over $1bn, and we held a meaningful equity stake in the projects. My business partners and I spent over four years putting these deals together, and we put in all the money we had. We signed the term sheet with the Chinese state bank to finance the first project and were about to start work. Two months later, Russia annexed Crimea; everything turned upside down, and it all disappeared in a day. After Crimea, I am more cautious about going all-in on one "big thing", and I think it makes sense to de-risk, even a bit, sooner rather than later. When I was younger, like many entrepreneurs, I was willing to take more risk, probably a bit reckless, and willing to make a big bet on the one big thing I was working on. With experience, and as I saw different situations play out around me (massive raises and big failures), I changed my view. Now I look at it as an infinite game. It doesn't matter how far or how quickly you can rise; the most important thing is to stay in the game and survive long term. There will always be ups and downs, and you need to withstand the storms and have enough resources to come out the other side. I've seen several times when people made a lot of money pretty fast, then lost most of it because of concentration and poor risk management. ## Staying all in versus taking some money off the table Plenty of big fortunes were kept by holding on, and Larry Ellison's is the example: [CNBC put it at about $365bn](https://www.cnbc.com/2025/09/18/larry-ellison-365-billion-fortune-wealth-management.html?ref=capitalfounders.io) last year, most of it Oracle shares he kept. He borrowed against them instead of selling, with 277m pledged as collateral on Oracle's own filing, against only $5.1bn in sales over the decades. One serial founder that Jan writes about paused his plan for a family office after a secondary, since an hour on outside investments would probably earn him less than an hour on his own fast-growing company. And Swen Lorenz, whose newsletter I regularly read, [points out](https://www.undervalued-shares.com/weekly-dispatches/50-things-i-now-know-about-investing-because-i-am-50/?ref=capitalfounders.io) that hardly anyone gets rich from investing, compared with building a business. All three of them are right about the upside. In the start-up world, we have this grind-and-hustle culture, where the talk is about changing the world, chasing unicorns, and billion-dollar valuations. De-risking or taking some money off the table might look like a weakness. I think it's more a sign of maturity and proper risk management if you are playing the long game. I am still figuring it out, but I am much more open now to taking some money off the table (some, not all, or a large amount) when the opportunity presents itself. That "some" is the point. The different way to think about it is that it is OK to take some money off the table as the business grows. That helps with diversification; this approach is less stressful, and in my opinion it is often better for long-term well-being and wealth-being. I think the more experienced you become, the more unsure you can be, because you've seen too many situations play out in very different ways. What works for one person can fail for another, and I'd be untruthful if I said I don't think about that. On the other hand, I now think more in systems, frameworks and scenarios. I'm more focused on downside protection, and I think long term. Crises bring opportunities, but you need to be liquid and in a strong position to take them. ## Two questions to answer before the money starts coming out If you want one practical takeaway, it's two decisions, and you don't need any paperwork for them. The first is what would make you take the first money out: the year the business is profitable enough to pay a dividend, the next priced round, or simply a date. The second is how much that first amount would be, as a percentage or a figure; Jared Sorin, a lawyer at Brown Rudnick, [told Crunchbase News](https://news.crunchbase.com/startups/liquidity-secondary-share-sale-founders-sorin-brown-rudnick/?ref=capitalfounders.io) last year that 5% to 10% of a founder's holdings is usually seen as reasonable, which is a rule of thumb, since nobody has counted how often founders sell. Christopher Nelson at Managing Tech Millions [puts the timing](https://managingtechmillions.com/p/your-portfolios-insurance-policy?ref=capitalfounders.io) as "The best time to diversify is when you don't feel like you need to." Writing the two down takes 20 minutes, and the useful place for them is with your board papers, or wherever you prepare for the next round, so you've already decided before anyone else puts a number in front of you. ## How I'm thinking about de-risking My position is still highly concentrated, but I am now more open to de-risking when such an opportunity arises. Which of the three it would be depends on where the business is at the time. What I'm working towards is the same either way: building assets in addition to the main business, and income that doesn't depend on it. I am still working on it, but it is definitely on my mind. What happened in Crimea is why sooner matters to me. With experience, you learn to live with uncertainty, and I'm not even surprised anymore when something happens. If you run a business or build something, things will happen all the time. So I think I've learned to live with uncertainty and be OK with it. Now I am more focused on protecting the downside, the different scenarios things can play out in (even the highly unlikely ones), and how to prepare for all of them. As the saying goes, hope for the best, prepare for the worst. ## On the Radar ### **Half the family offices Citi surveyed bought more public stocks this year.** Citi Wealth asked 351 family offices in 41 countries, with an average family net worth of $2.1bn, in June and July. Nearly half had added to public equities, more than 40% made no big changes after this year's shocks, 41% still aim for 7% to 10% a year, and nearly 90% are up for 2026 so far. Two things to hold your own plan against: what return you're aiming for, and whether it says anywhere what you do when markets drop. [Read more →](https://www.citigroup.com/global/news/press-release/2026/citi-wealth-2026-global-family-office-report-clients-shifting-focus-public-equities-deliberate-resilient-amid-uncertainty?ref=capitalfounders.io) ### **Three questions for anyone who has plugged data into an AI tool.** Amin Naj at Net Worth argues that after this year's adviser-AI launches, firms have been wiring client information into AI systems under data policies you signed years ago, without asking. His three questions: "Which AI systems have access to my information?", "Where does my data sit, and is any of it used to train AI?", and "If I moved firms tomorrow, what would come with me?" Ten minutes to send them to everyone who holds your data, and the third doubles as your leaving test for any of them. [Read more →](https://www.networth.pro/rogue-intelligence/?ref=capitalfounders.io) ### **Your family office can shrink to a desk that forwards emails.** Johnny Kao's letter describes a family office that has hired a full outside bench and become a scheduling desk that books meetings, chases replies and passes things on. His test: "Coordination asks: how do we keep this moving? Management asks: is this still solving the original problem?" If you're running your own money without staff, you are that desk. Narrow the brief before the next hire, and read each memo against what you asked, rather than what they answered. [Read more →](https://johnnykao.substack.com/p/the-most-dangerous-form-of-outsourcing) ### **Book the year-end review now, and make it two meetings.** Christopher Nelson at Managing Tech Millions runs his as two separate events: 2026 closes in October and early November, and 2027 opens with a proper review before Thanksgiving. He splits everything into four areas (Vision and Strategy, Wealth Management, Business Operations, People) and gives each one a single verb, maintain, manage or change, decided somewhere other than his desk. The dates are worth putting in the calendar this week. If an area has no verb you can name, it isn't done. [Read more →](https://managingtechmillions.com/p/why-i-start-my-q4-in-september?ref=capitalfounders.io) ### **Borrowers are walking out of private credit funds and into bank loans.** Mercer Advisors has swapped roughly $1.6bn of private credit at 4.5 points over the benchmark, lent by KKR, Ares, BlackRock and Apollo funds, for a $1.65bn seven-year bank loan at 2.75 points, saving about $29m a year. Bloomberg's tally shows $9.2bn of syndicated loans moving into private credit this year, versus $19.5bn moving out. If you're in a private credit fund, the companies leaving are the ones good enough for a bank loan, so ask the manager how much of the book went to banks this year, and what came in behind it, at what margin. [Read more →](https://www.wealthmanagement.com/ria-news/wealth-manager-mercer-takes-out-private-credit-with-new-loan?ref=capitalfounders.io) ### **Find out who your adviser's firm belongs to, and when its owner needs an exit.** Mr Family Office's read on the wealth roll-up is that buyers now want the custody, workflow, tax work and family-office services along with the assets, and he cites PwC's count of 109 asset and wealth management deals in the first quarter of 2026, three-quarters of them wealth managers. He also writes: "Advisers who sold in are often held by earn-outs rather than loyalty, and a good number leave once those expire." So two questions at the next meeting: which fund owns the business your adviser works for, and when it has to get out. [Read more →](https://www.mrfamilyoffice.com/p/the-great-wealth-management-roll-up?ref=capitalfounders.io) ## New on the Site This memo stops at the first money out. Thursday's article picks up once there's enough outside the company to need running: four ways to do it, solo, single, multi and virtual, and what each costs, with the only published cost numbers being for the staffed single office. Read it: [Four Family Office Models and What They Cost](https://www.capitalfounders.io/family-office-models-compared/) This was [**Capital Signals**](https://www.capitalfounders.io/tag/capital-signals/) — weekly briefings on what's reshaping founder strategy on wealth. Go deeper: [Playbooks](https://www.capitalfounders.io/playbooks/) · [Wealth Architecture](https://www.capitalfounders.io/tag/wealth-architect/) · [Investment Strategy](https://www.capitalfounders.io/tag/investment-office/) · [Business Building](https://www.capitalfounders.io/tag/build-mode/) · [Life Design](https://www.capitalfounders.io/tag/life-os/) Found this useful? Forward it to a founder who's thinking about this stuff. Got a question or disagree with something? [Get in touch](https://www.capitalfounders.io/contact/). New here? [Subscribe](https://www.capitalfounders.io/#/portal) for one email a week. ⚠️ ****Disclaimer:** This content is for informational and educational purposes only. It is not investment, legal, or tax advice and should not be relied upon as such. The views expressed are the author's own and do not represent any employer, firm, or institution. All investing carries risk, including loss of principal. Past performance does not guarantee future results. 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