Frequently Asked Questions
Common questions from founders preparing for — or navigating after — a business sale.
What is a liquidity event?
A liquidity event is when a business owner converts their equity stake in a private company into cash or publicly traded securities. Common types include a sale to a strategic acquirer, a private equity buyout, a management buyout, an IPO, or a SPAC transaction. For most founders, it is the single largest financial event of their lives.
How early should I start planning before selling my business?
The most valuable planning happens 2–5 years before a sale. Dynasty trust formation, QSBS analysis, entity restructuring, and estate freeze strategies all depend on acting before the company's value is locked in by a transaction. Planning that starts after an LOI is signed captures at most 5% of the available benefit.
What is QSBS (Qualified Small Business Stock) and how much can I exclude?
Section 1202 of the tax code allows founders of qualifying C corporations to exclude up to $10M (or 10x their original investment, whichever is greater) of gain from federal income tax. The stock must be held at least 5 years. With a stacking strategy using non-grantor trusts, this exclusion can be multiplied across multiple taxpayers — potentially sheltering $20M, $30M, or more of gain from federal tax entirely.
What is a dynasty trust and do I need one?
A dynasty trust is an irrevocable trust designed to hold assets outside your taxable estate for multiple generations. By transferring business equity into a dynasty trust before the company appreciates significantly, you freeze the estate tax value at the transfer date. All future growth happens inside the trust, not on your personal balance sheet. Founders who act early can remove tens of millions from their taxable estate before a transaction closes.
What should I do with money after selling my business?
The priorities after a liquidity event are: (1) establish a tax-efficient investment structure; (2) build a spending plan that distinguishes capital from income; (3) evaluate Private Placement Life Insurance (PPLI) to eliminate annual income tax on portfolio growth; (4) continue estate planning to prevent a large estate tax bill at death; (5) choose an investment approach focused on preserving capital across full market cycles rather than chasing short-term returns.
What is the difference between a fiduciary and a non-fiduciary financial advisor?
A fiduciary is legally required to act in your best interest at all times. A non-fiduciary (broker-dealer) is held only to a suitability standard — meaning a recommendation is acceptable as long as it is not obviously inappropriate, even if a better option exists for you. Quantum Leap Wealth Management is a fee-only RIA fiduciary — we receive no commissions, no third-party payments, and no revenue from product sales.
How do I find a wealth manager for a business exit?
Look for a registered investment advisor (RIA) who works specifically with business owners going through liquidity events. Key questions to ask: Are they a fiduciary? Are they fee-only (no commissions)? Have they worked with founders at your deal size before? Do they coordinate tax, estate, and investment planning together under one roof? The planning that protects the most value happens before the sale, so start early.
What is PPLI (Private Placement Life Insurance)?
PPLI is an institutional life insurance structure that wraps a custom investment portfolio inside a life insurance policy. Investments compound without annual income tax drag. Policyholders can borrow against the policy for tax-free income. The death benefit passes income-tax-free and, if held in an irrevocable trust, outside the taxable estate. PPLI is typically available to investors with $5M or more in investable assets.
How much money do I need for family office services?
Traditional single-family offices typically require $100M or more. Quantum Leap Wealth Management provides family-office-style coordination — across investments, tax strategy, estate planning, insurance, and private market access — for founders in the $5M–$50M range who need institutional rigor without the ultra-high minimums of a dedicated family office.
What is a 3(38) investment fiduciary for a 401(k)?
Under ERISA, business owners who sponsor a company 401(k) plan carry personal fiduciary liability for investment decisions. A 3(38) investment manager accepts full discretionary authority over the plan's investment lineup and relieves the plan sponsor of that liability. Quantum Leap accepts 3(38) appointments, selecting, monitoring, and replacing investments on behalf of the plan — so the business owner is no longer personally exposed.
This content is for informational purposes only and does not constitute investment, tax, or legal advice. Quantum Leap Wealth Management is a registered investment advisor.