Analysis

May 24, 2024

What is a wealth partner and why do founders need one?

Large liquidity events can potentially transform a founder’s wealth — but who do you turn to as you seek to preserve and grow what you’ve worked so hard to create? 


Emma Sheppard

5 min read

Sponsored by

Citi Private Bank

Few tech entrepreneurs found a startup for financial rewards only, but a significant liquidity event can transform a business owner’s personal wealth overnight.      

Whether returns are crystallised through a merger, acquisition, IPO or selling shares, founders need to consider what happens next. 

“That transition from owning concentrated, illiquid wealth to liquidity is really complex and calls for careful planning,” says Madeline Seddon, private banker at Citi Private Bank and head of Citi Latitude across EMEA – the private bank’s programme for next generation leaders. 

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“Founders need to consider how to manage the risks, enhance liquidity and ensure they’ve structured their personal wealth in the most efficient way.”

What is a wealth partner and why do you need one? 

Wealth management is not just about managing wealth but also ensuring its longevity and aligning it with someone’s short- and long-term personal goals. That’s where a wealth partner — such as Citi Private Bank — comes in. 

But what do wealth partners do?

In the first instance, a wealth partner will ask founders various questions such as where they see their life in the future, where they want to live and whether they envisage establishing a family office. They will work to build a holistic wealth plan that can be evaluated on a regular basis and help work with an external team of advisors who can offer tax and legal advice as required. 

Part of my job as a private banker is to think about who within my network is useful for me to connect a founder with, so we can create an entire ecosystem around founder-led businesses.

“Our portfolio analytics team can also perform a detailed analysis of a founder’s wealth, including their business holdings and provide guidance around where we anticipate risk arising,” Seddon says. 

Many leave it too late though, she adds, which can leave them with fewer options. 

“If the correct planning isn’t in place before a liquidity event, they can have potentially higher tax liabilities, or they might not have the kind of flexibility they hoped for. It’s important to have those conversations as early as possible,” she recommends.  

Citi Private Bank serves ultra-high-net-worth (UHNW) clients and focuses on those with a net worth of over $25m. It is part of one of the world’s largest financial institutions with a network that spans nearly 160 countries, as of April 2024.

From a UHNW perspective, Citi Private Bank works with one in four of the world’s billionaires, as of April 2024, and regularly runs events for its community of clients, collaborating with a number of top academic institutions, including the University of Cambridge and Massachusetts Institute of Technology (MIT). 

“More than 50% of our clients are founders or business owners [as of 31 March 2024],” Seddon says. “Part of my job as a private banker is to think about who within my network is useful for me to connect a founder with, so we can create an entire ecosystem around founder-led businesses.” 

That might include invitations to events in collaboration with Citi venture capital teams such as Citi Ventures, to connect founders, investors and venture capitalists with each other and professionals from across Citi.

“Introductions like these can be invaluable and enable founders to foster connections with their peers to spark ideas and opportunities for business growth, new ventures and financing,” adds Seddon.

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A one-stop shop

Beyond helping manage their wealth, wealth partners such as Citi Private Bank can also help founders find efficiencies and accelerate growth within the business itself, through collaboration with Citi Commercial Bank.

We’ve worked with multiple companies when they were relatively small, seeing them through this entire journey to an IPO a few years later.

Piotr Tyminski, Europe, Middle East and Africa Head of Digital, Tech and Comms for at Citi Commercial Bank, works with tech companies from seed round level all the way through IPO and beyond. Those first conversations with founders will usually happen around international expansion, he says. 

“Very often we engage with technology companies that are moving into 10 to 15 new markets but working with more than 20 banks. That’s not something you can effectively manage in a relatively small company,” he says. “The beauty of our solution is you can serve all of those countries from a single point of entry. You always deal with one application programming interface (API), and one account manager that’s responsible for all your needs across the globe. We’re a one-stop shop.” 

We are a bank, so we are also lending money to companies at various stages and facilitating access to capital.

Other founders might be interested in improving working capital and cash flow, optimising trade flows or raising external funds for business growth, he adds. 

“We are a bank, so we are also lending money to companies at various stages and facilitating access to capital,” he says. “We’ve worked with multiple companies when they were relatively small, seeing them through this entire journey to an IPO a few years later. It’s amazing to see.” 

If you are interested to see how Citi Private Bank can support you, you can contact them via their website here.

Disclaimer: Views, opinions and estimates expressed herein may differ from the opinions expressed by other Citi businesses or affiliates. The information contained herein is not intended to be an exhaustive discussion of the concepts mentioned. Citigroup Inc., its affiliates, and its employees are not in the business of providing tax or legal advice to any taxpayer outside of Citigroup Inc. and its affiliates. These materials are not intended or written to be used, and cannot be used or relied upon, by any such taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor.