Anthony Glomski is president and founder of AG Asset Advisory Family Office and author of Liquidity and You: A Personal Guide for Tech and Business Entrepreneurs Approaching an Exit. He works extensively with accomplished entrepreneurs through all phases of their business lifecycles especially those engaged in selling their companies.
Russ Prince: Please describe AG Asset Advisory Family Office including the expertise your firm provides.
Anthony Glomski: Our firm is a multi-family office focused specifically on founders approaching an exit or sale. We tend to get involved at different points in time depending on the situation, whether the founder is years away from selling, weeks away, or sometimes after the sale.
A common example is a founder who came to us that wanted to minimize the taxes on the sale, eliminate taxes on some of their investments after the sale, and be positioned to start another company and pay $0 taxes when that company is later sold. The driving goals were to have flexibility, leave a healthy amount behind for the family, and amplify the amount given back to causes that are important to them. With this combination of specific outcomes, we were able to eliminate and defer over 50% of the tax bill when the company was sold.
Another typical example was a founder with adult children who is worried about 40% of their wealth being eroded by the estate tax. In this scenario, they wanted to get a significant portion of the money to the kids and pay the legal minimum amount of tax on the transaction. They also wanted to ensure that the money is not spent on Ferraris or future ex-in-laws. We had enough time on the clock, and this type of planning resulted in more than $10 million in tax savings while ensuring the monies were not squandered and stayed in the family line.
Planning like this will always have advantages and disadvantages, and it's critical that an owner understands specifically what they are. There is no free lunch or silver bullet. Throughout the years working with very successful business owners, our experiences have shown us that every situation is truly unique. A good outcome is a direct result of tailoring something that specifically works for each founder.
Prince: How is your firm structured to deliver the range of expertise you provide?
Glomski: Our role is to help founders avoid missing opportunities, avoid overpaying taxes and manage complexity. The key to being able to do this is by acting as a facilitator and coordinator of specialized experts. Over more than a decade, we built a network of experts who are instrumental in enabling us to deliver exceptional value to successful business owners.
Like in the examples I just described, maybe the founder wants to get the business to the kids and avoid paying tens of millions of dollars in taxes. Or, they want to be in a position to start their next business after the sale and pay $0 taxes on that sale. There are a few people in the country that do this incredibly well. We leverage our relationships with these experts to get preferential treatment, align them with the right people and coordinate with their existing professionals.
But, the jumping-off point is really understanding what someone wants and helping them understand the options available for their unique situation. We focus on outcomes such as:
• What do you want this to look like for you after a sale?
• What do you want for your family?
• What concerns do you have concerning the sale itself?
We never focus on products. So many times, we see well-intentioned professionals pushing products like a donor-advised fund or a dynasty trust, or some investment product that doesn’t make sense for their particular situation. There are no one-size-fits-all solutions. Founders don't need a product; they need a process that focuses on them and provides options so that they can make the best decision.
Prince: You talked about entrepreneurs aiming to sell their businesses. What are the most common mistakes these owners make?
Glomski: There are statistics out there that show 50% of business owners are unhappy after they sell. That is dismal considering many of them are receiving the largest sum of money in their entire life.
What could cause this? Several reasons. We see time and time again a lack of a coordinated team working on behalf of the founders and their families to execute a plan to get the results that line up with what they want. Sometimes it’s not so much that the owners are making a mistake, but rather the owners are surrounded by technicians—some of them might be great in specific areas—and they aren't presented with all the different options. As a result, they miss opportunities, overpay taxes and are handed a giant bag of complexity.
Another reason for dissatisfaction is they do no planning before the sale. Also, a common mistake is setting up plans and structures that don't deliver the results they want.
For all planning strategies, an entrepreneur should be able to answer a few simple questions:
• How does it work?
• Why did I do it, and what does it accomplish?
• What are all the advantages and disadvantages?
The three biggest mistakes we typically see are paying way too much in taxes, leaving extra money on the table and not sufficiently protecting themselves before and after the transaction. If a founder can clearly identify the outcome they want based on the options available to them, this creates perfect harmony when executed by a coordinated team of top technicians.
When this doesn't happen, there's a tremendous amount of discord. It doesn't need to be this way. We certainly aren't the only firm out there, and we aren't right for everyone, but what years of experience have shown us is that all founders can avoid these mistakes and drive optimized outcomes when they get the right team.
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