Exit Paradox Michael Sonnenfeldt. Post-Liquidity Ultimate Wisdom.
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Dec 28, 2023 Michael Sonnenfeldt, founder of TIGER 21 and serial entrepreneur, shares profound insights on life after a liquidity event. He discusses the critical need for introspection post-exit and how such experiences teach humility. The conversation dives into the ‘2% rule’ for spending, the contrast between angel investing and capital preservation, and strategies for finding new purpose after a business sale. Sonnenfeldt emphasizes the importance of patience, gratitude, and giving back, and reveals how creativity can drive financial success.
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The 2% Rule
- The 2% rule suggests spending only 2% of your capital annually to preserve it.
- This helps maintain wealth long-term, especially for those transitioning from high business incomes.
Entrepreneurs as Investors
- Entrepreneurial success doesn't guarantee investment success; diversification is key.
- Exited founders should recognize their limitations in passive investing and avoid overpaying.
Time and Risk Management After Exit
- Take 3-5 years to fully invest your funds after exiting a business.
- This allows you to learn about yourself and the market, and adjust to realistic passive returns.