As a founder, it can be challenging to know when to make the shift from pouring every dollar you have into getting your startup off the ground to taking a few chips off the table to eventually paying yourself first. However, every business owner should begin to separate their own personal finances from the business as soon as possible for a few different reasons.
In this episode, Malcolm Ethridge sits down to discuss best financial practices for founders and how to know when it is time to begin to allocate your revenue to more personal goals. Malcolm runs through tools and tricks to grow your business and build sustainable financial habits for you and your business.
Malcolm discusses:
How to invest in your own business and build funds for your long-term goals
Counterbalancing your business’s high burn rate with low personal expenses
Reinvesting extra cash flow into retirement and diverse investments
Protecting what you have built and your loved ones through insurance
For startups, investors often put a lot of emphasis on cap tables. They want to see a diluted picture of equity ownership among you as a founder, any co-founders or partners, early investors, and key employees before they’ll seriously consider handing over a check to invest themselves in your company. That’s because a healthy cap table illustrates not only your business’s potential for growth in the future, but also communicates to your investors just how solid your judgment is as a CEO.
In this episode, Malcolm Ethridge speaks with Jason Ray about how to tell a compelling story to potential investors. Jason shares why investing in what matters to you as a business owner and to your business doesn’t always sacrifice an investment return, and how it can help attract investors who are interested in your cause. He also dives into why it’s important to know your key performance indicators from the very beginning, why some businesses are hesitant to take loans and how that can prevent them from growing, and what goes into good financial modeling and forecasting.
Jason discusses:
Why investing in ESG doesn’t necessarily mean sacrificing investment returns
Why it’s important to get yourself in gear from the very beginning as a business owner and be prepared for a potential investor
How a lack of experience with taking out loans and knowing how much they need creates hesitancy, and how that hesitancy can become a hurdle for business growth
What goes into good financial modeling and forecasting
Jason founded Zenith Solutions to deliver accessible, high-quality financial education and advice to individuals and institutions. His work is inspired by racial and age wealth inequality that exists in society.
Prior to founding Zenith, Jason helped renovate a longstanding independent wealth advisory firm, Carnegie Wealth Management, by building new technology, private placement structures, and research capabilities. He delivered investment advice and financial plans to families with a net worth upwards of $10M. Earlier in his career, Jason also gained extensive experience evaluating and creating solutions for financial advisors at Lincoln Financial and FS Investments.
Though it may seem like a very distant and high-class problem that only the super-wealthy among us will ever have to contend with, for many tech workers who have accumulated a significant sized stake in their employer, it is not unlikely that estate taxes are something they will have to consider as a part of their overall financial plan. In fact, with the number of bills currently floating around the halls of Congress with the intention to increase tax revenue by lowering the estate and gift tax thresholds, there could be significantly more Americans who will be impacted by this “problem” soon enough.
In this episode, Malcolm Ethridge speaks with Aaron Rubin, a partner at Werba Papier, about some of the lesser-known estate planning challenges facing those with concentrated equity positions. Aaron also shares some of the more common mistakes he sees clients make prior to and immediately following an IPO that could be avoided with proper planning.
Aaron discusses:
How to design a plan that keeps more of your money in your pocket and out of the hands of the IRS
The interesting and unique things he has seen people do following an IPO
Who should be concerned about qualified small business stock
What an intentionally defective trust is and how to apply it
Aaron Rubin is a partner at Werba Papier, a wealth management firm that caters to pre-IPO executives and early employees. Prior to his current firm, Aaron spent time at Deloitte where he worked on trust and estates and honed his skills in their private client advisory. He also received his JD from the University of Illinois. In 2019, he published Financial Adulting, a guide to help young professionals navigate the challenges of taxes and investments in estate planning.
As anyone who has ever bought and sold any sort of digital asset in the last couple years can attest, the rules and regulations around reporting those transactions to the IRS can be very fuzzy. Coupled with the lack of information made available by the IRS itself, and the lack of general knowledge and adoption of crypto by the accounting community, it can be very tough for investors to make heads or tails of it all.
At best, you manage to stumble across a couple of really helpful twitter posts or youtube explainer videos offering solid tidbits of information that may or may not be directly applicable to your individual circumstances. But at worst, you make a mistake in reporting your transactions in one year, that ultimately opens up your returns from previous years to scrutiny, and you find yourself in the middle of a full-blown audit with no idea how you got there.
In this episode, Malcolm Ethridge speaks with Micah Fraim, CPA and crypto enthusiast, about the taxation of crypto. Micah shares his knowledge about how crypto and NFTs are taxed, how to save money on taxes when investing in crypto, why you should stay up to date on the ever-changing IRS taxation policies about crypto, and how to track activity across multiple digital wallets without using a platform like Coinbase.
Micah discusses:
How crypto and NFT trades are taxed today
How to take advantage of the current crypto winter to save on taxes
Why he is such a fan of cryptos and their future long-term
Some recommendations for how to tack crypto activity and keep good records across multiple digital wallets
Micah Fraim is the founder of Fraim Cawley & Company. Micah is a certified public accountant who works with small business owners on preparing tax returns and offers more advanced tax planning. In addition, he is also a self-proclaimed crypto enthusiast and has recently published the book, Decryptifying Crypto Taxes.
