Ever met someone you felt was married to their job? Chances are it was an entrepreneur – there are few people who can match their energy, passion, drive and vision for the business they’ve built from the ground up.
The problem with being married to the job, though, is monogamy. Having an actual husband or wife competing for time and attention can bring a raft of challenges in the face of growing a business which often demands at least as much TLC as its rival.
Quite often, the job wins, contributing to the country’s unenviable 45 per cent divorce rate. Little wonder, then, that a growing number of entrepreneurs are proposing with a sparkling rock in one hand and a pre-nuptial agreement in the other.
Five years ago I was maybe handling a couple of pre-nups a year. Now it can be upwards of ten times that, and it isn’t just me. It’s hard to put a figure on it since one is not legally obliged to register a pre-nup, but my lawyer friends and colleagues in the same field of expertise report the same sharp upwards trend.
It’s not that entrepreneurs are innately unromantic, but they perhaps have a more commercial approach to life than most others. They certainly have a more commercial approach to prenups.
Entrepreneurs tend to have invested huge amounts of time, energy and money in building their businesses, and very often the foundations for that were laid at an early age. Consequently they’ve had little time for love’s young dream, and are more likely to marry slightly later in life when they’ve built up substantial assets of their own.
It may sound unromantic, but it’s often the case of simply being keen to protect something they’ve created, rather than a wicked desire to leave a spouse penniless and destitute if the marriage doesn’t work out as expected.
Most of the prenups I see are designed to ringfence specific assets, rather than to close out any claims for the future ex. A prenup is not meant to be a weapon with which to beat your former beloved into submission, but rather a document which provides both parties with stability and certainty over the division of assets if the marriage fails.
That might be as simple as an agreement which say that, other than the assets connected directly to the operation of a business, everything will be split down the middle 50/50 in the event of a divorce. It might go further and make additional provision for the spouse if the marriage doesn’t work out.
When you consider the risk someone has taken to establish and build that business, and the jobs which might have been created in the process, the commercially-focused decision to agree arrangements in advance seems awfully sensible. That has the added advantage of avoiding having to drag the full details through the courts in the case of an acrimonious separation, which could have a reputational impact on the business. It benefits the spouse, too, who knows he or she will be looked after if the couple splits up in years to come.
Some people view the very existence of prenups as a sad indictment of society’s changing view of marriage; that it is no longer expected to be permanent. Maybe that’s true, but it doesn’t change the fact that many people like the stability and certainty a good prenup can provide.
That more entrepreneurs are now choosing to sign up to a prenup is perhaps surprising, since it is, after all, an agreement designed to mitigate risk – and how many entrepreneurs can resist a bit of risk?
Entrepreneurs by their very nature do tend to end up married to their jobs, no doubt despite some good intentions, so it’s perhaps no bad thing they decide to plan for the unknown by drawing up a prenup. Whether your views persuade you or not that it’s unforgivably unromantic, there are sufficiently high numbers of prenups being signed to suggest that it’s at the very least a good business decision.