Global Entrepreneurial Wealth Report

Much is made of the emergence of first-generation wealth, particularly in Asia, and we’ve found that this extends to first-generation entrepreneurialism as well. Our research shows that over half of entrepreneurs (54%) don’t have a connection to a family business, and are instead creating their own paths by starting companies around their interests or to capitalise on new opportunities. 

The entrepreneurs we spoke with live and work across borders – in total, three quarters have businesses operating outside of their home country or territory. They’re driven by benefits for their business and in their personal lives – from operational efficiencies to education for their children – and expect further opportunities to emerge in the coming years.

Just over a third of entrepreneurs (34%) are thinking about exiting in the next five years – and it’s not just the older age groups who are planning their next steps: 34% of those 18-35 are looking to exit within five years. We see that entrepreneurs planning to exit within the next five years are already starting relationships with wealth managers (33%), planning how to invest in financial markets (30%) and thinking of new ventures (22%).

When planning an exit, there is a strong focus on keeping the business in the family – transferring it to the next generation of the immediate family or to another family member (52% in total). This rises to 58% for those with investable assets of more than USD10 million. There are regional variations here, with entrepreneurs from Asia and the Middle East more likely to keep it in the family than those in Europe or the Americas.

Entrepreneurs planning to pass on their business cite readiness of the next generation as the leading reason for exiting. For those planning to sell, it’s about finding the right buyer. Around four in ten entrepreneurs believe they’ll exit when they no longer enjoy their role, but we can see that only 3% of former entrepreneurs left for this reason.

38% of entrepreneurs have already begun to make wealth transfers – either formally or informally. Another 40% are planning to wait until their later years – a trend that holds across different regions. However, this does differ for those with larger wealth (more than USD10 million of investable assets) where only 25% have started a transfer.

There are some entrepreneurs who openly talk about their wealth transfer plans with their family (36%), with this more likely for those who are currently active in the family business or are first-generation entrepreneurs who have involved the next generation. However, this leaves almost two thirds (64%) who haven’t yet spoken to their family about their wealth succession plan. Notably, 8% say they never intend to, and this rises to 13% for those with investable assets over USD10 million. 

When it comes to concerns about transferring wealth, entrepreneurs worry about the work ethic of family members (34%), their desire to pursue personal goals (33%) and a lack of interest in the business (33%). Those with investable assets over USD10 million have more specific concerns, in particular their own ability to cede control. For their part, nearly half of next generation entrepreneurs coming into the family business do want to forge their own path, with 32% largely aligned to the family values but intending to make changes, 9% definitely planning to make changes and 4% looking to redirect the business or start a new one.