Here’s some advice from Carl Icahn about bringing your kids into the family business that I read in the latest issue of Forbes (NOTE: there doesn’t appear to be an actual link to the Icahn piece so I copied it here):
Start early. Over the years Brett and I would take long walks every weekend. He was very responsive, always interested. He has a real good mind—and he learned by osmosis. Brett saw me working all the time. Some of my cynicism about the business and Wall Street—he inherited that. He’d listen and learn a lot; he has a good talent for it. He took courses in accounting so he’d understand balance sheets. People in the office taught him a lot, too. We’d look at different stuff and dig into it. He picked it up very well. He’s not one of those spoiled rich kids.
Treat them like normal employees. This isn’t nepotism. You say, “Hey, look, you’re working here like everybody else: You start at the bottom and you get no perks and you have to understand that.” You’ve got to be almost tougher with them than anybody else. You don’t want others to think he’s got an advantage. Brett was always sensitive to that. Sometimes I only had the top two guys in the firm at a meeting, and I’d say, “Hey, Brett, come in here, you might learn something.” And he’d say, “Look, Dad, unless you bring in the other three guys I work with, I shouldn’t go in.”
Test their mettle. When Brett and his partner, David Schechter, started the Sargon portfolio, they said, “Give us $300 million,” and I said, okay, I had the right to veto anything they did. They gave up their salaries to take a small percentage of the profits. There was a hurdle rate. This way it was their baby. The choices they made were a little bit different from what I would’ve done—they were more in growth areas, in technology—but they did great with it, basically doubling the money. And in the new $3 billion investment portfolio, they’re up $720 million since they started last August.
“He’s not one of those spoiled rich kids…” Maybe not but he’s definitely had opportunities that other kids won’t get. I guess that’s the point of being rich.
I definitely like the part about treating them like normal employees. If you don’t, company moral will suffer.