How entrepreneurs can go beyond being wealthy on paper

After Ottawa entrepreneur Adam Miron co-founded cannabis company HEXO Corp. in 2013, he couldn’t even go to the pub for a pint with friends without thinking about business. Mr. Miron had accepted investments from friends and family, including every member of his Monday-night pub trivia group. “It [was] like a bloody shareholders meeting,” he recalls.

Now in his early 40s, Mr. Miron has launched more than 15 start-ups – from a political news site to a storage and management company for digital assets like cryptocurrency – and completed three exits. Along the way, he’s learned to avoid a common pitfall among entrepreneurs: funnelling their personal wealth into their company but being much less willing to take it back out.

“There are too many stories of entrepreneurs that become quite wealthy on paper, but don’t take some of that and actually put it into family planning for their better wealth,” he says.

During HEXO’s first year, Mr. Miron and his co-founder didn’t pay themselves. He and his wife had three young children, and the household lived on her government maternity benefits. “That’s the journey entrepreneurs are familiar with. It’s that risk.”

To protect their personal wealth, entrepreneurs must recognize that a corporation and its owner are legally distinct, says lawyer Andrew Higdon, senior associate in estates and trusts at KPMG. “The assets of the corporation don’t belong to you,” he says. “They belong to the corporation.”

As businesses become more successful, owners may consider opening a separate holding company to include assets or investments. Instead of leaving all accumulated profits inside the operating company itself – which could become available to creditors if a company faced a legal dispute or bankruptcy – earnings can be paid as dividends to the holding company.

That separation matters when money is moving in the other direction, too. Mr. Miron says founders should think carefully about how their contributions are structured. For example, investing personal money through a shareholder loan can have tax advantages vs. putting additional capital into the business for more equity.

When HEXO went public in 2017, Mr. Miron and his co-founder felt significant pressure from shareholders and advisors not to sell shares, because executives selling could be perceived as lacking confidence in the company.

Meanwhile, “All of the other founders around us were just routinely selling, protecting their wealth. You really have to learn to navigate that.”

With one of his companies, Mr. Miron sometimes went in the opposite direction during capital raises. “Instead of taking anything off the table, I was writing cheques at every round,” he says, in an effort to encourage other investors to come on board.

At one point, his family office encouraged him to sell some of his shares, telling him his grandchildren wouldn’t have to work. “I said, ‘no, you’re crazy because these shares are going to be worth so much more money.’”

They weren’t. As the cannabis market declined, Mr. Miron watched significant share value disappear. And selling became harder as prices fell, because it could look like he was “abandoning ship,” he says.

There are practical restrictions to selling shares in a public company, too. Mr. Miron recalls one year when acquisitions and large capital raises meant executives only had days to trade outside of blackout periods, which are imposed to prevent illegal insider trading.

“I’ve been in situations where I’ve had executives very much looking forward to translating some of their equity compensation into personal wealth but simply weren’t able to logistically.”

In 2024, Mr. Miron launched a business advisory firm, Founded Partners. He tells clients that when equity makes up part of their compensation package, they should consider converting at least an equivalent amount of that into personal wealth whenever a liquidity event arises.

He also advises entrepreneurs not to assume they only have one chance at financial success. Taking some money off the table, he says, can create the freedom to build again. “That’s how you can really start to translate one win into another and the next.”

Today, Mr. Miron is enjoying the fruits of his labour, travelling with his family through South America for an extended period. While he’s temporarily taken a step back from building companies, he says “I’m an entrepreneur through and through. There’ll be another big business or two, I’m sure.”