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Library/Yale School of Management

M22Case notelong-term holds

On the Nature of Long-term Holds: Why Entrepreneurs Should Embrace this Strategy

A. J. Wasserstein, Mark Agnew, Brian O'Connor. (2020)

Yale Case, no number printed, May 28, 2020 (revised September 17, 2023)

Argues owners of good businesses should hold for decades because each sale leaks value to tax, fees, idle cash and redeployment risk. Six practitioner interviews by Wasserstein (March to April 2020) plus compounding illustrations: "avoiding the exit nets $24.9 million, while exiting and paying capital gains taxes five times nets $16.8 million" (p7), on assumed 15% growth, 25 years and 25% tax. The authors concede survivor bias and that "our math is overly simplified". All dollar results are model outputs.

Source

Full citation

A. J. Wasserstein, Mark Agnew, Brian O'Connor. (2020). On the Nature of Long-term Holds: Why Entrepreneurs Should Embrace this Strategy. Yale Case, no number printed, May 28, 2020 (revised September 17, 2023).

https://som.yale.edu/sites/default/files/2025-04/On%20the%20Nature%20of%20Long-term%20Holds%20Why%20Entrepreneurs%20Should%20Embrace%20this%20Strategy.pdf

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