00:00We're going to have a session here on founder wealth in the AI era.
00:05Every cycle in tech creates wealth, as we know,
00:08but the AI cycle is doing it faster and often in more concentrated ways
00:14than we've ever seen before.
00:16Founders are hitting meaningful scale on compressed timelines.
00:20That raises a different set of challenges
00:22because building wealth and managing it are two very different skill sets.
00:27So, fun fact, Adam is a former New York State arm wrestling champion.
00:36We're not going to do that.
00:38Another reason my daughter thinks I'm pretty cool.
00:40Does she challenge you to an arm wrestle?
00:45She's a lefty.
00:46That sport is all about quick reflexes and explosive strength.
00:50In the era of AI, founders are building these massive piles of wealth
00:56at absolutely lightning speed.
00:59From where you sit, and you've been a founder as well as an advisor,
01:04what is the biggest danger of moving too fast when it comes to managing that wealth?
01:09I always like to create contextualization for anything coming out of anyone's mouth.
01:14So, just real quick.
01:15So, Coriant, a lot of people don't know what it is.
01:17I feel like on this stage, everyone knows who everyone is.
01:19I've got to be the first person that no one knows who I am at all.
01:22So, and it's funny, I was at another event yesterday where I was bookended by Ray Dalio and David Beckham.
01:28Wow.
01:28And today, I'm by like, you know, pretty much the smartest people on the planet.
01:33I'm starting to feel like it should just say comma bathroom break,
01:36which has nothing to do, it has to do with me.
01:37So, I'll try to create a little entertainment.
01:39So, Coriant is client oriented.
01:41We clearly went a little heavier on the Orient part.
01:44If we added the L, it would have been Chloriant,
01:45which would have sounded something like a detergent of sort.
01:49We are, as of Monday, the largest non-bank wealth manager on the planet.
01:53Wow.
01:54Which a lot of people are like, I didn't know that.
01:55Half a trillion dollars.
01:56We're a private partnership, which is super unique and super fun.
01:59No matter what door you knock onto the building at Coriant,
02:02you get access to the whole building.
02:05Not every firm works like that.
02:06You get sort of trapped in the room of the person who opens the door.
02:09I run the entrepreneur and founder practice,
02:11which means any entrepreneur or founder on the planet,
02:14they could be in Africa, they could be in Europe, they could be in Asia,
02:16they could be in Canada, or they could be in the U.S.,
02:18will meet me and have the collective wisdom of everything we've done.
02:22So, we've worked with hundreds of founders.
02:24So, as I start giving you some answers,
02:25there's a lot of context, did it myself as a peer and as a provider.
02:28I think one of the biggest problems is with all this explosive growth
02:31is people suddenly have so much visible wealth.
02:35And we live in a Zillow world, as I say,
02:37where people can pretty much look up almost anything.
02:40So, as a founder gets new wealth,
02:41they have to be really, really cautious about what's above the surface,
02:44which everyone can see, and then what's below the surface and what's left.
02:48What you don't want is a Popsicle stick,
02:50because from the surface, the two look the same.
02:52But over here, this could be a full iceberg underneath,
02:55and up above, there's not so much transparency.
02:58So, we try to be really mindful about making sure to not do too much too fast,
03:03and also make sure you explain your why,
03:05not just the what that people can see.
03:07So, with this acceleration,
03:11and in some cases, liquidity timelines also being accelerated,
03:15how is that changing the way founders think about wealth earlier in that journey?
03:20I mean, information asymmetry has changed so much
03:24with, obviously, this whole conference in AI.
03:26So, founders are getting super, super smart
03:29around the speed at which things are going,
03:31and especially in the AI space is parabolic.
03:34So, some of what I'm going to talk about is sort of IQ-ing,
03:37sort of like structural,
03:38and some of the EQ-ing and psychological.
03:40On the IQ-ing side, what they're doing a lot right now
03:43is making sure they're starting the company in a structure like an LLC
03:48and converting to C-Corps.
03:50And the reason I explain that is a lot of you probably know
03:52about qualified small business stock, QSBS.
03:54If you do this the right way,
03:56because of how fast these things are accelerating with value,
03:59by starting as that LLC instead of the C-Corp,
04:02you're able to get way more than that $10 million
04:05or now $15 million as of last July.
04:07That's a really big structural change.
04:09I've been working with founders since sort of the end of 2010
04:11when QSBS really became more well-known.
04:14So, that's a big new thing that they're doing.
04:16The other thing is people are getting bought so quickly.
04:19Usually, the timeline is that five years for the hold
04:22for qualified small business stock.
04:23It's gotten truncated a little bit on a sliding scale
04:26as of last July with three, four, five years.
04:28I'm working on a lot of deals right now
04:30where people are selling in one or two years.
04:32So, they're being really smart
04:33about the tax efficiency of that.
04:35So, I would say those are some of the things
04:37that we're watching a lot
04:38in terms of the inception formation
04:40and then the mindset of not losing these great tax perks.
04:45But with that speed, there is uncertainty.
04:47So, when you're looking at this
04:49and you're advising people,
04:51what distinguishes the founders
04:53who are building durable wealth
04:56versus those who don't?
04:58I think about a concept we all remember as a kid.
05:01Remember you had a maze
05:02and one day you finally realize
05:03if I start with the word finish
05:05and go backwards,
05:06it's a lot easier to solve it.
05:08So, the founders that we work with
05:10that have backwards mazes,
05:11they think 10, 20 years ahead and jump back.
05:14And they realize that
05:15if they can start creating a ballast
05:18to this parabolic growth
05:19of their own company,
05:21they're able to go after the company
05:23with more gusto
05:23and they're able to be calmer.
05:25So, a lot of them take out secondary
05:27every single time they can.
05:29I tell people that I have no one
05:30who regrets selling
05:31and countless that regret not
05:32because if whoever bought your secondary is right,
05:35whatever's left is going to be worth so much
05:37and the utility at the margin
05:39of those dollars in the future
05:40over your liquid denominator
05:41versus today is radically different.
05:43So, by doing that,
05:45they're able to totally be long-term.
05:47Their investors love it
05:48because they're not focused
05:49on getting liquidity
05:49because they have it.
05:50The only mistake sometimes people make
05:52is they just start angel investing
05:53with all that money
05:54instead of creating something boring.
05:56But it's sexy to do that.
05:57Of course it's sexy.
05:58And it's illiquid.
05:59And then, unfortunately,
06:00it gets correlated into one.
06:02Right.
06:05So, you advise
06:07at least 100 founders,
06:08maybe more, right?
06:09I try not to say huge numbers
06:11because it doesn't sound intimate,
06:12but a couple of hundred.
06:13Okay.
06:13Oh, a couple of hundred.
06:14Well, we have a big team.
06:15Yeah, yeah.
06:16All right.
06:16So, tell us
06:18what have you learned
06:21about the most forward thinking
06:22of those founders today,
06:24financially or strategically?
06:27You know,
06:27what sets them apart
06:28from the ones you are?
06:29I'll start with the strategic.
06:30I always talk about
06:30that time machines exist,
06:32nothing that anyone's invented
06:33on the stage yet,
06:34but in your head.
06:35And if you look at the next decade
06:37and you say,
06:38hey,
06:38is the next year
06:40100% of time
06:42or only 10%
06:43of the next 10 years,
06:44time moves slower.
06:46So, I think historically,
06:48the folks that had
06:49time arbitrage
06:49to their side
06:50were able to just move
06:51with much more patience.
06:53Something over the next month
06:54didn't feel that urgent.
06:55I think on the flip side,
06:57there's founders right now
06:58that look at the next year
06:59as actually 300%
07:01of what time used to look like
07:03and actually understand urgency.
07:05And why we can't really invent
07:06more hours in the day,
07:07they're using things
07:08that we've been talking about
07:09on this stage
07:10to invent them.
07:11I think on the really
07:12specific financial side,
07:14something that's been missed a lot
07:15is because things
07:16are moving so quickly,
07:18a lot of folks historically
07:19had a cliff vest
07:20with their equity
07:21for the first year.
07:22And the problem with that
07:23is you can't gift stuff
07:25that's not vested
07:26into a trust.
07:27So, even if you take
07:29some election
07:29that tells the IRS
07:30it's my property,
07:31something called
07:32an 83B election,
07:33the other part
07:34of the tax code
07:34doesn't care.
07:35That has to do with gifting.
07:36So, by having some
07:37of your equity
07:38vested immediately,
07:40it allows you
07:40to start moving stuff
07:41into different structures
07:42that gives you
07:43massive optionality
07:44at an outcome,
07:45especially for multiplication
07:47or some people
07:48like to call it stacking
07:48of qualified
07:49small business stock.
07:50Right.
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