#22 The Future of Work: How a Personal Holding Company Can Transform Your Career and Life
The traditional approach to work no longer fits the complexities of modern life. As we grow and our lives become more multifaceted, it’s essential to rethink how we integrate work and life. Too often, work is still seen in binary terms: employee or freelancer, working or not working. But there’s a more dynamic and fulfilling path.
A HoldCo offers the flexibility to build, grow, and create value on your own terms. It empowers you to take control of your professional journey, aligning your work with your evolving identity and personal goals.
That said, it’s not for everyone—it requires capital, risk-taking, and a long-term commitment. But for those ready to embrace the challenge, it’s a transformative way to create value and design a work-life model that grows with you.
What is a HoldCo?
A HoldCo is a company that owns and manages other companies.
Unlike business angels (BAs), a HoldCo typically takes a more involved approach, acquiring a controlling stake or at least 5% ownership. This results in a smaller, more focused portfolio and greater operational involvement than what is common with BAs.
Compared to venture capital (VC) or private equity (PE) firms, a HoldCo has a longer-term outlook. The goal is often to build enduring businesses that generate dividends, without the pressure of outside investors. This independence provides greater freedom and flexibility in decision-making.
HoldCos come in various sizes and approaches. For instance, Berkshire Hathaway, with a market cap exceeding $1 trillion, represents an extreme example of a large-scale HoldCo. At the other end of the spectrum, Personal Holding Companies (PHCs) stand out for being owned and operated by a single individual. These can range in size from modest portfolios to substantial enterprises worth hundreds of millions. Our focus will primarily be on PHCs and small to medium-sized HoldCos.
Now let’s move on to why it makes sense to build a PHC and what are the key advantages.
The Why: Key advantages of building a PHC
Below are some of the key advantages of building a PHC compared to just building one business or working in PE or VC.
Diversification: By owning multiple companies, you diversify risk and become more resilient to withstand economic cycles.
Flexibility: Unlike other structures like PE or VC, the profits from one entity can fund growth in another allowing you to optimize ROI of your investments.
Lifestyle: Running a single startup or VC fund can feel like being chained to a rocket. It’s exciting, but it consumes your life. A HoldCo, when built thoughtfully, offers more flexibility. You’re not managing every business day-to-day—you’re overseeing the portfolio and setting strategic direction. it also allows you to leverage your existing skills, capital, and network while pursuing diverse interests.
TAX: It highly depends on your location but holdcos generally help optimize your taxes. The most common advantages are: avoiding wealth tax, reducing capital gains tax in the event of selling one of the companies and reducing dividends tax.
Long term value creation: HoldCos aim to nurture and grow businesses indefinitely. It’s about creating value that compounds over decades rather than years.
Synergies: multiple businesses can operate independently but benefit from shared resources, expertise, and long-term thinking.
Many entrepreneurs turn to HoldCos after their first successful "exit." Once they’ve sold their initial venture, they often face the question: jump back into the startup grind, work for someone else, or build something more enduring?
A HoldCo offers a flexible alternative—not just for financial returns but for personal ROI. Founders can shape their businesses around their priorities, whether that’s growth, creating a positive impact, or optimizing for personal freedom. This approach creates a balance of financial success, personal fulfillment, and lasting contributions.
Now let’s dive into the most common use cases.
Most common use cases of PHCs
Virtually anyone can own a PHC, but here are the four most common scenarios where they’re used:
Former Business Owners: After selling a business, many entrepreneurs create a PHC to reinvest the sale proceeds. This can help defer personal taxes while allowing for strategic reinvestment.
Existing Business Owners: Entrepreneurs may establish a PHC to hold shares of their operating company, safeguarding investment assets that aren’t actively needed in the business.
Family Investment Vehicles: Wealthy families often use PHCs to manage investment portfolios, facilitate estate planning, and ensure smoother transitions of wealth across generations.
Real Estate Holdings: PHCs are also popular for holding and managing rental properties, providing a structured way to generate passive income through rents.
A HoldCo isn’t just a business strategy; it’s a lifestyle choice. It’s about embracing the long game and finding joy in building, owning, and nurturing diverse ventures. For entrepreneurs who value autonomy, flexibility, and leaving a lasting legacy, a HoldCo offers a powerful framework.
If you’re considering starting one, ask yourself: What do I want my work—and my life—to look like 20 years from now?
Dale Duro papi!