Why Founders Often Lose Their Fortunes in the First Generation

Many people start businesses for the first time without any family background in entrepreneurship. They are often discouraged by friends and family who believe it’s safer to have a regular job until retirement. Despite this, some take the risk to start their own businesses hoping to build lasting wealth.

Economic and Cultural Challenges

Around the world, and especially in places like Nigeria, maintaining and growing new wealth can be tough due to unstable government policies and tough economic conditions. Many family fortunes disappear within a few generations because of these challenges.

Managing a business requires not just initial money but also a smart plan for growth. Many business founders try to grow their businesses too fast without solid reasons or fail to protect themselves by diversifying their income. Cultural expectations, like the “black tax,” where successful individuals financially support their extended family, can also drain resources that could have helped grow the business.

Personal Decisions That Affect Business

Personal choices can also affect a business’s finances. In cultures where having more than one spouse is common, supporting multiple households can use up a lot of money. Without careful management, this can lead to financial problems that affect not only the family’s wealth but also the health of the business.