By Bill Heneghan in Pre-Exit Planning — 30 Nov 2025

Pre-Exit Planning: What to Build Before the Wire Hits

Smart founders build the infrastructure before they need it. Entity structures, trust architectures, professional teams, investment frameworks — everything gets established while you're still "just" a business owner.

The biggest wealth-building opportunity happens before you sell

(TL;DR) Most founders think an exit is the finish line. It's actually the starting gun for a completely different race. The biggest mistake is waiting until after the wire transfer to start planning. By then, you're playing defense with a target on your back. Smart founders build the infrastructure before they need it: entity structures, trust architectures, professional teams, investment frameworks — everything gets established while you're still "just" a business owner. You don't figure out tax optimization after the IRS gets interested. You architect the entire system while you're still in control of timing and implementation.

Quick Answer: What should founders do before an exit?

Timing	Action
18+ months out	Form holding company, establish professional team
12-18 months out	Trust planning, tax strategy, entity cleanup
6-12 months out	Investment framework, deployment plan
3-6 months out	Final structure review, execution prep
At close	Execute transition plan immediately

Why Waiting Until After Kills Your Options

Here's the hard truth: every tax strategy, every asset protection structure, every smart move you could make — they all work better before liquidity.

After the wire hits:

Capital gains are already triggered
Your net worth is public (or soon will be)
Wealth managers are circling
Emotional decisions multiply
Time pressure forces bad choices

Before the exit:

You control the timing
Structures can be established cleanly
Trust funding happens at lower valuations
Professional relationships get built without urgency
Tax planning has room to breathe

The founders who build generational wealth understand something different: liquidity isn't retirement — it's a role transition from operator to allocator. You're not stepping back. You're stepping up to a different game entirely.

Phase 1: Pre-Liquidity Architecture (12-18+ Months Out)

This is where the real work happens. While you're still "just" a business owner, you're quietly building the infrastructure that will manage your wealth for decades.

Entity Structure

Form your holding company now — not after the exit.

Wyoming LLC for privacy and asset protection
Clean operating agreement with flexibility for growth
Separate banking and accounting from personal finances
Integration pathway with future trust structures

Cost: $2,500-$10,000 to set up properly. Value: Potentially millions in tax savings and liability protection.

Professional Team Assembly

Build relationships before you need them urgently.

CPA specializing in exits and alternatives: Not your startup's bookkeeper. Someone who understands liquidity events, installment sales, and alternative investments.
Estate planning attorney: Trust structures, entity optimization, succession planning. Find someone who works with founders, not just retirees.
Tax attorney (if complex): For larger exits or complicated structures, separate tax counsel adds value.

Don't wait until you have a signed LOI to start these conversations. Interview multiple professionals. Test them on smaller projects. Find people who understand founders.

Trust Architecture

Certain trust strategies only work before a liquidity event.

Grantor trusts: Can be funded with pre-exit equity at lower valuations
Intentionally Defective Grantor Trusts (IDGTs): Freeze estate value while you pay income tax
Spousal Lifetime Access Trusts (SLATs): Asset protection plus estate planning

These aren't DIY projects. But starting the conversation 12-18 months early gives your attorney time to design the right structure.

Investment Framework

Decide how you'll deploy capital before you have capital to deploy.

What asset classes interest you?
What's your risk tolerance across different time horizons?
What allocation targets make sense for your situation?
What's your decision-making process for evaluating opportunities?

Having a framework prevents the emotional investing that destroys most post-exit founders.

Phase 2: The Liquidity Event

When the money hits, you're on the clock. Every day that capital sits in personal accounts is a day of unnecessary tax exposure, legal vulnerability, and missed compounding opportunities.

What Winners Do:

The capital flows immediately into pre-established structures. Not next month after you "figure things out" — immediately.

Your job isn't to celebrate or decompress. Your job is to execute the transition plan you built in Phase 1.

What Most Founders Do:

Spend months "taking a break" while their capital burns value through poor structure and delayed deployment.

They park everything in a savings account. They tell themselves they'll "get to it" after they recover from the exit. They take meetings with every wealth manager who calls.

Meanwhile:

Tax optimization windows close
Cash earns nothing
Bad advice accumulates
Emotional decisions get made

The Execution Checklist:

Timeline	Action
Day 1-7	Capital flows into Holdco structure
Week 1-2	Meet with CPA to confirm tax strategy
Week 2-4	Begin deployment into predetermined allocations
Month 1-3	Complete initial deployment phase
Ongoing	Weekly pipeline review, monthly performance check

Phase 3: The Identity Transition

This is the dangerous period.

You're no longer the CEO, but you're not yet the capital allocator. You're drifting.

This is when founders get targeted by every wealth manager in town. When they make emotional investment decisions. When they buy expensive toys instead of productive assets. When they start angel investing randomly instead of systematically.

The symptoms:

Checking your bank balance constantly
Taking every pitch meeting
Making $100K decisions in 30 minutes
Feeling purposeless without the company
Spending to fill the void

The solution:

You need a new operating system:

VFO infrastructure in place
Revised professional team
Clear role as chief capital allocator
Calendar that reflects your new job

Your calendar shifts from operational meetings to deal reviews, performance assessments, and strategic planning.

Phase 4: Strategic Wealth Deployment

Now you're playing offense again.

Direct business acquisitions. Real estate development. Private equity investments. Philanthropic initiatives. But all flowing through systematic processes you control.

You're not chasing opportunities anymore. You're creating and evaluating them based on criteria you've developed and allocation frameworks you've established.

Your expertise from building companies translates directly to evaluating and improving other people's companies. That's your edge.

Deployment framework:

Asset Class	Allocation	Purpose
Public markets	20-30%	Liquidity, market exposure
Private credit	20-30%	Income, stability
Real estate	20-30%	Cash flow, tax benefits
Direct ownership	10-20%	Control, operational edge
Growth/venture	5-15%	Asymmetric upside

Adjust based on your expertise and risk tolerance. The percentages matter less than having a framework.

Phase 5: Generational Infrastructure

You've built a wealth machine that operates independently of your daily involvement.

Multiple income streams. Systematic reinvestment. Family governance structures. Succession planning that ensures continuity across generations.

You don't retire in the traditional sense — you evolve into a role that combines strategic oversight with systematic wealth building. Your focus shifts from growing wealth to designing systems that grow wealth regardless of market conditions or your personal involvement.

The 18-Month Pre-Exit Checklist

Months 18-12: Foundation

Form holding company (Wyoming LLC recommended)
Interview and select CPA specializing in exits
Interview and select estate planning attorney
Open business banking for Holdco
Begin trust planning conversations
Document current entity structure and ownership

Months 12-6: Structure

Complete trust architecture design
Fund trusts with pre-exit equity if appropriate
Clean up existing entity structure
Establish investment criteria and framework
Build relationships with potential deal sources
Create deployment plan for post-exit capital

Months 6-3: Preparation

Final review of all structures with professional team
Confirm tax strategy for the specific transaction
Prepare execution checklist for close
Set up tracking systems (Airtable, QuickBooks, etc.)
Brief family on transition plan if relevant

Months 3-0: Execution Ready

All structures in place and tested
Professional team on standby
Deployment targets confirmed
Day-one execution plan documented
Mental preparation for identity transition

Common Pre-Exit Mistakes

Mistake 1: Waiting for the "right time"

There's never a perfect moment. If you're 18+ months from a potential exit, start now. The infrastructure helps even if the exit doesn't happen when expected.

Mistake 2: Using your startup's advisors

Your startup's lawyers and accountants are great for the company. They're probably not specialists in personal wealth structuring, trusts, or alternative investments. Get dedicated professionals for your personal wealth.

Mistake 3: Underestimating the emotional transition

Building a company was your identity. Losing that identity hits harder than most founders expect. Plan for it. Build new structure before you need it.

Mistake 4: Thinking the exit is the goal

The exit is the enabler of bigger goals, not the destination. Founders who treat liquidity as the finish line often struggle with what comes next. Know what you're building toward.

Mistake 5: Delegating control instead of execution

Delegate the administrative work. Keep control of the strategy. No one will manage your capital with the same obsession, edge, and stakes that you will.

How Pre-Exit Planning Maps to The VFO Value Stack™

Pre-exit planning builds the foundation for all five levels:

Level	What Pre-Exit Planning Establishes
Level 1: Legal Infrastructure	Holdco, entity structure, trust architecture
Level 2: Financial Oversight	Professional team, tracking systems, visibility
Level 3: Risk + Privacy	Asset protection structures, entity separation
Level 4: Opportunity Allocation	Investment framework, deployment plan, criteria
Level 5: Legacy & Governance	Succession planning, family communication

The founders who build before the exit have all five levels ready to activate. Those who wait are scrambling to build Level 1 while their capital sits exposed.

Key Takeaways

The biggest mistake is waiting until after the exit to start planning
Every tax strategy and protection structure works better before liquidity
Smart founders build infrastructure 12-18 months before an expected exit
Form your holding company now — not after the wire hits
Assemble your professional team before you need them urgently
Trust planning only works before a liquidity event
Have an investment framework ready before you have capital to deploy
The identity transition from CEO to allocator is harder than most expect
Liquidity isn't the finish line — it's the starting gun for a different race

Frequently Asked Questions

When should I start pre-exit planning? 12-18 months before an expected liquidity event is ideal. Some strategies (like certain trust structures) require even more lead time. If you're within 12 months, start immediately — you can still capture significant value.

What if my exit doesn't happen? The infrastructure you build is valuable regardless. A holding company, professional relationships, and investment framework serve you whether you exit in 12 months or 5 years. You're not wasting effort.

Do I need all these structures for a small exit? Scale the complexity to your situation. Even a $3M exit benefits from a holding company, proper tax planning, and a deployment framework. You don't need elaborate trusts for every situation, but you always need structure.

What's the most important thing to do first? Form your holding company and find a CPA who specializes in exits. These two steps unlock everything else. The Holdco gives you a structure to receive funds. The CPA helps you optimize the tax strategy.

How do I find the right professionals? Ask other founders who've exited. Interview at least three candidates for each role. Test them on smaller projects before the exit. Look for specialists in exits and alternatives, not generalists.

What if I'm already past my exit? Start now. You've lost some optimization windows, but most strategies still apply. The worst choice is continuing to delay. Build the infrastructure today.

How does this connect to The VFO Value Stack™? Pre-exit planning builds the foundation for all five levels of the Value Stack. You're establishing Legal Infrastructure (Level 1), Financial Oversight systems (Level 2), Risk + Privacy structures (Level 3), Opportunity Allocation frameworks (Level 4), and Legacy & Governance foundations (Level 5) — all before the capital arrives.

What's the biggest regret founders have post-exit? Not starting earlier. The tax savings alone from proper pre-exit planning often exceed $500K-$1M+ on significant exits. Add asset protection and investment optimization, and the value compounds dramatically.

Go Deeper

The Family Office Playbook provides the complete guide to pre-exit planning, post-exit deployment, and building generational wealth.

Get the Book →

About the Author

Bill Heneghan is the founder of LegacyIQ and author of The Family Office Playbook. He developed The VFO Value Stack™ framework to help founders with $3M–$50M in liquidity build generational wealth using family office strategies. His work focuses on making family office strategies accessible to founders without requiring traditional $50M minimums.

Internal LegacyIQ Resources

The VFO Value Stack™: How Founders Think Like a Family Office — The five-level framework for building wealth infrastructure.

The Wire Hit. Now What? A Founder's First 90 Days After Exit — What to do immediately after liquidity arrives.

Why Founders Should Build a Holding Company Before Exit — The Level 1 structure every founder needs.

How Founders Build a Family Office Without the Overhead — The Virtual Family Office model for post-exit operations.

The Family Office Playbook — The complete guide to implementing The VFO Value Stack™. Available on Amazon.

Sources and References

Exit Planning Institute — Research on exit readiness, pre-exit planning timelines, and founder transition outcomes.

Business Enterprise Institute (BEI) — Data on exit planning best practices and value optimization strategies.

PwC Private Company Services — Guidance on pre-transaction planning, entity structuring, and tax optimization for business owners.

KPMG Private Enterprise — Research on liquidity event preparation and wealth transition strategies.

Fidelity Investments Entrepreneur & Exit Research — Studies on post-exit founder behavior and wealth preservation outcomes.

IRS Publication 544 (Sales and Other Dispositions of Assets) — Tax treatment of business sales, installment sales, and capital gains.