In last few years, many young entrepreneurs and computer engineers have started their own firms and rapid growth in computing technology aided their growth.
These start-ups are now turned into hot cakes as internet giants like Google, Facebook, Microsoft and others are aggressively looking to acquire start-ups to spur their growth and maintain technological edge, turning founders of these start-up firms into millionaires overnight.
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But these rich youngsters, who are brilliant entrepreneurs, are mostly unacquainted on estate planning. This has led to an open battle being fought by firms like Goldman Sachs, Morgan Stanley, UBS and others to woo these new millionaires and manage their new found wealth.
The intensity of the battle being fought can be gauged from the statement of Geoff Lewis, co-founder and chief executive of mobile application firm TopGuest, which was acquired by ezRez Software. He said he was contacted by Goldman, UBS and Merrill within hours of the deal’s announcement.
Banks charge roughly 1% for overseeing a wealthy investor’s portfolio which adds up when billions of dollars are involved.
Banks are acting aggressively with advisors tapping on existing clients for prospects, using industry sites, like TechCrunch or AllThingsD. They also rely on social network LinkedIn which provides them database of start-up employees.
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By GlobalDataWealth management firms are also devising new strategies and opening up new office and hiring new advisors to better serve their clients.
Goldman, which is eliminating some 1,000 jobs worldwide, plans to increase staff in San Francisco by 30% by 2012. UBS has already more than doubled its wealth management staff in the area since 2008.
To cope up with the challenge, Morgan Stanley has formulated a dual strategy, with one team of advisers responsible for senior executives at large technology start-ups and another for lower-level employees.
