Keystone Global Partners

Forward-Thinking Wealth Management For Tech Founder

Meet Caroline, 37

Caroline has just sold the company she founded after successfully building it up for 6 years. Her company was acquired by a larger public company, and she received a part-cash, part-stock deal with additional earnouts depending on company performance over the next two years. Her stock compensation is subject to lockups and blackout periods. She plans to complete the two years and then possibly pursue something different or take some well-deserved time off.

The Problem?

After selling her company, Caroline feels like she has a lot of cash but is still hesitant to raise her standard of living. She knows she shouldn’t hold cash and should invest it, but isn’t sure where to start.

Caroline’s Goals

Caroline is married and has two children. She wants to buy a vacation home and is interested in venture investing as well as becoming an advisor to startups. In addition, Caroline wants to start saving for her children’s education, and her friends have told her it’s important to have insurance for her family. These tasks have been sitting on her plate for years, but she feels overwhelmed and never finds the time to do them.

How We Helped

A friend of Caroline’s suggested she speak with Keystone. Based on the information he provided, we conducted a goals and needs analysis that helped shed some light on Caroline’s unique opportunities.

Goals and Needs Analysis Opportunities
Company Acquisition Stock qualified for QSBS making the first $10mn of his stock sold exempt from Federal taxation saving Matt a material amount on taxes
What to do with Stock once Lockup Expires Education on her options and tax implications, established trading plan created to reduce single stock concentration risk while abiding by the lockups and blackout periods, with the ultimate goal to reduce concentration risk
Family Protection Selected guardians for her children, set up trusts to provide for children, and updated core estate documents including a will, trust, power of attorney, health care directive since her circumstances have changed since she first established them
Hesitant to Spend More Money or Raise Living Standard Created a personal balance sheet and forecasted cash flows to show Caroline what would be sustainable and still conservative to give her comfortability in raising his lifestyle and living standards
Future Plans Helped Caroline realize that work was optional in the near future, that she could start another business, never work again, or anything in between
Startup Investing Established an asset allocation based on Caroline’s risk tolerance and return objectives, added a separate carve-out bucket specifically for venturing investing, and established a program to make venture investments
Feeling Overwhelmed Delegated several personal financial tasks to a financial advisor to guide and complete items for her
Wealth Transfer Incorporated tax-efficient gifting techniques to minimize taxes and maximize the amount of assets her heirs will receive
Interest in Philanthropy Education on philanthropic strategies which maximize donation power and considerations on using philanthropy in the future to educate her children to be familiar with investing and care about the community
Education Savings for Children Set up 529 accounts and front-loaded 5 years of contributions

DISCLAIMER: THIS CONTENT IS PORTRAYING A HYPOTHETICAL CASE STUDY AND NOT BASED ON ACTUAL INDIVIDUAL CLIENT RESULTS.

Will you help me solve any and all financial problems I may encounter?

Yes, and it’s likely we’ve helped others solve similar problems as well such as business sales, QSBS, tax minimization, estate, 401(k) plans, IRS audits, family deaths, disability, real estate, debt, social security, Medicare, health insurance, college, gifting, and most other financial issues.

What types of clients do you specialize in?

We work specifically with tech founders.

What services do you provide?

A relationship with Keystone involves comprehensive financial planning around retirement, insurance, estate planning, tax planning, and investment management.

How do you help clients implement their financial plans?

We firmly believe that even the best financial plan is of little value until it’s implemented. To help you achieve your goals without feeling stressed or overwhelmed by the noise along the way, we will work together to make the necessary decisions then we take care of the execution.

Are your recommendations truly in my best interest?

As an SEC Registered Investment Advisory firm, we are held to a fiduciary standard, which legally requires us to do what is in our clients’ best interests. This differs drastically from some of our competitors who are only held to the “suitability standard,” meaning that our competitors can make recommendations that are suitable but may not be in the clients’ best interests. Our commitment to an honest and ethical culture has allowed us to build deep, trusted relationships with our clients.

What are all the different ways you get paid?

We are only paid via one management fee. We believe this allows us to have an unbiased framework to select the best investments for you and to give you advice tailored to your needs, not ours. We believe compensation drives behavior, and the way someone is paid influences the work they do. Many financial firms have complex fee arrangements; we do not.

Why would I choose you as my advisor and not do it myself?

There’s certainly a possibility that if you put enough focus and energy into it, you could do it all yourself. But like everyone else, your time is limited and most people prefer to focus on family or business. We’re here to free up your time while leveraging our wealth of experience in addressing concerns, presenting solutions, and working toward your financial goals.

What are the benefits of working with an independent advisor compared to a bank or large advisory firm?

Our independent and conflict-free approach allows us to find the best solutions for our clients. This gives you the advantage since larger firms might be compelled to make specific recommendations, sell proprietary products, or may be restricted in the advice and services they offer. We offer guidance customized to your needs and goals which is a personalized level of service, care, and attention larger firms just can’t provide.

Do you use proprietary funds?

At Keystone, we do not use proprietary products. We do not receive commissions or backend fees from any third parties. We do not earn compensation for recommending one fund vs. another. We believe this allows us to have the most unbiased framework to select the best investments for you and to provide advice tailored to your needs, not ours.

Where do you keep my money and how can I see it?

For your convenience and safety, we use Charles Schwab as the custodian for the majority of our client assets. Schwab administers more than $7 trillion dollars and we selected them to care for yours as well based on a variety of criteria including safety of assets, financial strength, and ease of use. As custodian, Schwab holds your funds and provides direct reporting to you. Your funds will be held in accounts under your name and can be viewed anytime online at Schwab.