March 2024

The Great Wealth Transfer

I've been keeping a close eye on the generational wealth transfer as Baby Boomers start passing down an estimated $84 trillion to their Gen X and Millennial heirs. $16 trillion of that is expected to shift hands in just the next decade alone. This monumental wealth transfer signals major investing opportunities. Many Millennials and Gen Zers have increased interest in search funds and acquiring “unsexy” cash-flow positive businesses.

I see openings for startups in two key areas:

1) Facilitating the Wealth Transfer

First, there is great potential for startups building solutions to help facilitate the secure, efficient transfer of assets between generations. With so much wealth moving down the pipeline, technology innovations could help reduce friction and costs for families navigating inheritance planning and execution.

Specific ideas I’m excited about include:

• Digital platforms for buying/selling small businesses, commercial real estate properties, and other assets about to change hands between Baby Boomer business owners and their next-gen successors. These could make it easier for Millennials to carry on family enterprises.
• Trust management platforms providing transparency, communication tools, and consolidated reporting to help Gen X trustees overseeing inheritance distributions to their millennial beneficiaries.
• Secure digital tools built specifically for estate planning attorneys, wealth managers, and family officers charged with managing high-value multi-generational asset transfers.

2) Startups Leveraging the Inherited Wealth

Secondly, as the next generation (of digital natives) comes into trillions of inherited wealth, their values and preferences will completely reshape business opportunities across industries like financial services, real estate, philanthropy, and leisure. I’m looking to back founders who deeply understand these next-gen wealth holders and can build products they’ll embrace.

For example, millennials care more about responsible, impactful investing. Wealth management startups fitting those preferences can capture wallets. Prop-tech tools can help first-time millennial home buyers enter the market. Philanthropy platforms have lots of whitespace to drive more effective, coordinated family giving. And digital-first leisure and travel brands catering to next-gen preferences should see windfall demand.

With seismic demographic changes underway as Baby Boomer wealth pours downstream, the time is now for entrepreneurs to harness this opportunity. I’m actively looking for founders responding to both waves of this trend - facilitating asset transfers as well as leveraging the trillions soon to land in next-gen hands.

Deals

• https://www.meetalix.com/