Startups provide great opportunities to grow. Startups are hard work, but they are fun, challenging and rewarding. And should your startup result in an exit, you can live comfortably, enjoying many of life’s good things. In the midst of your success, my encouragement to you is to share in some way with others. Besides just being the right thing to do, it keeps you connected with people and can ward off some unexpected maladies (like affluenza).
Financial security is a blessing, but it can also bring some hidden curses. We can easily fall into living an insulated life, leading to a privileged attitude. This becomes most apparent in your children. As parents, we want our children to have the best life has to offer. But as life enables you to have many things, children can develop an expectation of always getting their way. Kids can whine and insist on having the latest iPhone even though they just received a new phone last year. This happens when they haven’t learned the hard work needed in order to enjoy good things. You worked hard for your wealth, but your kids didn’t.
Warren Buffett’s Wisdom
While it’s not realistic to expect your younger children to earn a salary to pay for life’s expenses, it is reasonable to help them learn the value of hard work and stay connected with others who are less fortunate. One of my favorite stories is one where Warren Buffett was approached by one of his adult children for a $41,000 loan to remodel her kitchen. His response was epic: “You can go to the bank [to get a loan] like everyone else.” If you know anything of his life, you know that this response was not rooted in a selfish hoarding of his wealth, but in a desire to teach his family a set of values.
It Starts With You
Staying well-rooted starts with you. A parent who doesn’t set an example for their kids will wonder in frustration why their kids haven’t adopted their words of wisdom. Giving back to others is an important way to stay grounded. You don’t have to have the wealth of Bill Gates or Mark Zuckerberg to be able to share. If you’ve enjoyed an exit, you probably have more than enough to live comfortably.
Kishore is a friend of mine that sold his startup and subsequently started a charitable foundation to give back. His foundation drove an innovative, self-funding clean water project in India. In addition, Kishore heard of a young child that needed a costly surgical procedure that her parents could not afford, so he paid for it. Similarly, my own family is the beneficiary of someone else’s generosity. My youngest daughter is adopted from China. As an infant, she was left in the cardiac ward of a hospital because she needed open heart surgery to correct her VSD and ASD (two holes in her heart). She almost died several times, but a local businessman heard of her plight and donated the equivalent of seven years’ of a factory worker’s wages to pay for the surgical procedure. I do not know the man who paid for the surgery — I don’t even know his name — but my daughter is alive and thriving today because of his kind and generous gift.
If you’ve decided to share, it’s important to plan. If you’ve received a windfall, make sure you consult a financial planner with many startup founders among their clientele. One benefit of being charitable is the opportunity to soften the tax burden in your years where your income will be abnormally high. Set up a charitable fund. Both Schwab and Fidelity have simple, low-maintenance charitable funds that you can participate in without being a billionaire. If you are fortunate to be in the multi-, mutli-million dollar territory, consult your financial planner about the benefits of setting up a charitable foundation. (If you need a referral to a financial planner, I’ve had good relationship with Larry Steckler at Capital Financial.)
In addition to being generous with your money, remember to be generous with your time. Sometimes, it’s too easy to write a check and stay disconnected from true human need. Volunteer your time. When you volunteer, look for opportunities to talk to people you are helping. Listen to their stories. Connect with their difficulties. Involve your family — your kids might not be able to make substantive financial contributions to pay bills or fund a charitable cause, but they can still make a difference in someone else’s life by giving of their time and heart.
One of the things I’m most proud of is how my children give to support kids with special needs. My son just graduated from high school and has volunteered almost every week for over six years as a coach for e-soccer — a full-inclusion program for both typical kids and kids with special needs. He currently works a summer job helping children from low income families. He has developed an empathy and compassion for others far beyond the typical high schooler.
Startup life is amazing. There are great rewards professionally and personally. Should you be fortunate enough to enjoy an exit, remember to give back. When you give back, do so in a personal way that involves your family. You may just find that the rewards from doing so far exceed the benefits from your startup’s exit.