Entrepreneurs commonly pour everything into their business in order to start it, scale it and potentially sell it, including their time, talent, and treasure (capital). Business owners customarily concentrate their resources into the business. So, the idea of spreading risk into companies they don’t control would be a nightmare for many entrepreneurs.
If entrepreneurs are to invest in other ventures, they are likely to only do so when the company is well established and generates sufficiently high profits to provide surplus capital beyond the business’s needs.
However, by contrast, the general maxim in investing is diversification – spreading capital across asset classes, sectors, and regions – is the only “free lunch.” - says UBS.
The latest article written by our partner UBS explores why entrepreneurs
keeping wealth concentrated in their company may put their personal financial circumstances at risk.