"No One Ever Got Rich by Buying Stocks" -Chapter One (Limited Time Access)
- FOFA
- Sep 13, 2025
- 3 min read
For project owners and investors, the saying, "No one ever got rich by 'buying stocks,' only by 'selling stocks' to realize their fortune," may seem simple, but it profoundly reveals a core truth of the capital markets: buying creates on-paper fortune, while selling is what achieves real wealth.
For those who hold a substantial amount of equity, the art of "selling" extends far beyond simply clicking a button to reduce holdings in the secondary market. It is a comprehensive exit strategy that encompasses financial engineering, strategic negotiation, and long-term planning. Below are three key high-level pathways to realization:
I. Private Equity (PE) Exit: A Relay of Professional Capital and Value Realization
When a company reaches a mature stage, the founding team or early investors can choose to sell their equity in a single transaction to a private equity fund, achieving a concentrated realization of value.
Why is this a wise choice?
Efficient Liquidation, Avoiding Market Impact: Compared to the pressure that piecemeal reductions on the secondary market can exert on stock prices, a transaction with a PE fund is a private, large-block deal that can efficiently convert immense wealth into liquid assets.
Value Reassessment, Discovering True Intrinsic Worth: PE funds conduct rigorous due diligence, and their offers are based on a comprehensive assessment of the company's intrinsic value and future cash flows. This often results in a fairer, or even higher, valuation than the public market might offer.
Fueling the Company's Next Leap: Top-tier PE firms bring more than just capital; they introduce management upgrades, resource integration, and strategic restructuring. This lays the groundwork for the company's future IPO or acquisition, creating new peaks of value.
This path is the classic choice for founders and early investors to make a successful exit while bringing in professional support to elevate the company.
II. Mergers & Acquisitions (M&A) Exit: The Ultimate Harvest of Strategic Premiums
M&A is one of the most thrilling wealth-creation scenarios in the capital markets. When your company becomes a strategic target for a larger entity, the premium you can obtain by selling a controlling stake or the entire company far exceeds the imagination of the secondary market.
Why is this a pinnacle achievement?
Premium Acquisition, Cashing in on Strategic Dividends: To acquire technology, market share, talent, or eliminate competition, an acquirer is willing to pay a significant premium (20%-100% or even higher). This premium is the ultimate recognition of the company's "strategic value," not just its "financial value."
A Complete Exit, Opening a New Chapter: An M&A deal signifies a one-time, clean exit, allowing founders and investors to depart with substantial capital and gracefully move on to their next venture.
Pricing Power from Synergies: The premium enjoyed by the seller is, in essence, the buyer's discounted expectation of future "synergies." This is the smartest form of "selling," because you are not just selling the present; you are selling the buyer's future.
This path is the art of building a company into a strategically scarce asset and selling it at the highest possible price.
III. Establishing a Fund/Trust: Systematic, Intergenerational Wealth Management
For already successful entrepreneurs or families, the challenge of wealth shifts from "how to create it" to "how to preserve and pass it on." Transferring substantial equity assets into a family trust or a dedicated fund is the highest form of achieving this goal.
Why is this a long-term strategy?
Disciplined Selling, Professional Management: A professional institution systematically executes plans for divestment, hedging, and reinvestment, overcoming the human tendencies of greed and fear. This achieves diversification and long-term preservation and appreciation of assets.
Wealth Succession and Risk Isolation: Through sophisticated legal structures, the ownership, control, and beneficial rights of assets are separated. This effectively isolates risks and ensures that wealth can be securely passed down through generations.
Tax Optimization and Perpetual Operation: In many jurisdictions, such structures offer significant tax advantages and are the cornerstone for building a family's century-long legacy.
This path represents the ultimate wisdom of transforming single-stock wealth into an institutionalized, perpetual financial legacy.
"Buying" is the act of sowing, the beginning of a belief; "selling" is the harvest, the crystallization of wisdom. For project owners and investors, true prosperity lies not in how great the company you hold shares in is, but in whether you can, at the opportune moment, successfully convert that equity into decisive, real wealth through higher-dimensional means such as PE transactions, strategic M&A, or fund-based governance.
This is not just the completion of a transaction; it is the realization of a strategy and the beginning of a new chapter.
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