G2: Building the Next Generation

CHAPTER 12Buying Equity: The G2 Perspective

Becoming an owner will surprise you no matter how much you have prepared for it. The financial consequences of the decision will probably overwhelm you at first, but while those are quite significant, they will quickly fade into the background of your life. While buying equity in a firm is a financial transaction, it is most of all a statement that you will pour your talents, energy, passion, and time into the business for many years to come. Much like buying a house, you are financially investing most—if not all—of your money into the idea that the firm will be your home. It may even be the last firm you ever work for, and many partnership agreements are designed that way. When you buy equity in a firm, you are committing your career to that firm.

I remember making partner at Moss Adams and how excited I was to be recognized as one of the top professionals at a very large, successful, and prestigious firm. I remember becoming an owner at Fusion—the second firm of my career where I had an ownership stake—and not knowing exactly what that meant or what it was worth but nevertheless feeling excited about a new adventure and trusting that my partner would never steer me wrong. I remember selling a percentage of my current firm, The Ensemble Practice, to my first partner and realizing that the firm was no longer just mine, and perhaps that meant it was now a real firm. Buying equity was expensive and scary to do. Selling equity to a partner ...