New Venture Partners: Top Thirteen Things You Should Know
New Venture Partners: Top Thirteen Things You Should Know
Updated: 6/16/10
Business Issue
Establish due date for estimated capital calls
Review personal liability insurance
Review medical insurance issues
Prepare personal cash flow forecast & balance sheet
Carried interest: 4 – 6 years away (Don’t spend until in your pocket)
Partnership buy-ins ARE negotiable
***
Taxation Issue
Be aware of quarterly due dates: 1/15, 4/15, 6/15, 9/15, 12/31
Sock away money for estimated quarterly income taxes
Have tax person give you % of quarterly draw for taxes
Currently capital gain treatment may be ordinary in future
Importance of 83(b) elections
Estate Planning
Review wills and living trusts
Consider level term life insurance (Irrevocable life insurance trust)
Preventable War Stories
Purchasing bigger home when making partner.
Not projecting cash flow needs and having to take out emergency home equity line for capital calls and estimated taxes.
Partner passes away three years after making partner, leaves spouse and kids with no source of income.
Partner contracts cancer which goes into remission.
Leaves current firm and is now uninsurable because of pre-condition.
Partner gets sued by contractor working on home improvement.
While on business trip tax deadlines are not taken into account.
Spouse does not know what to do and financial advisor forced to liquidate funds at an inopportune time.
Partner passes away, leaves his half of community property to ex-spouse.
We hope you found this article about “New Venture Partners: Top Thirteen Things You Should Know” helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
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Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
GROCO.com is a proud sponsor of The American Dreams Show.
The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.
Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.
The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.
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