India's booming markets are creating a new class of first-generation millionaires—entrepreneurs who have transformed ideas into successful IPOs and unlocked unprecedented personal wealth. Unlike traditional high-net-worth individuals (HNIs), these founders are navigating wealth creation for the very first time, bringing a fresh approach to investment strategies.
Risk Appetite Sets New Millionaires Apart
In an exclusive conversation with Mint, Ashish Shanker, Managing Director and CEO of Motilal Oswal Private Wealth, revealed how these new-age millionaires differ significantly from legacy HNIs or family offices. "We're seeing the rise of a much younger set of millionaires and even billionaires in India as the startup ecosystem matures," Shanker explained during the interview conducted on November 27, 2025.
The key differentiator lies in their age and risk tolerance. Having built wealth through bold entrepreneurial risks, these founders remain comfortable with aggressive investments even after liquidity events. This contrasts sharply with legacy HNIs who typically become conservative once they've taken money off the table.
Private Markets Remain Comfort Zone
First-generation founders demonstrate remarkable organization in their wealth management approach. Once liquidity arrives, they immediately engage with wealth managers to structure holdings, establish governance rules, and plan capital allocation. Their strong connection to the ecosystem that enabled their success drives significant reinvestment into private markets.
Private market allocations range from 20-30% to as high as 50-60% of their wealth, far exceeding the 20-25% typically recommended for traditional family offices. This aggressive positioning stems from their deep networking within startup circles, familiarity with venture funds, and understanding of the entrepreneurial landscape.
These founders frequently become limited partners (LPs) in the same venture funds that previously supported their own companies, creating a virtuous cycle of investment and support within the Indian startup ecosystem.
Long-Term Vision Drives Investment Decisions
Having experienced the founder journey firsthand, new-age millionaires possess unique patience for long investment horizons. They comfortably allocate to companies that may be three to four years from IPO as well as early-stage startups where the journey could span a decade. Long lock-in periods don't deter them because they've lived through similar timelines in their own businesses.
Their return expectations from private investments naturally exceed public market benchmarks, typically targeting 20-25% or more compared to public market expectations of around 15%. Crucially, they understand that private market returns aren't linear and accept that years of minimal returns can be transformed by a single successful monetization event.
Contrast With Traditional Wealth Management
Legacy wealth approaches investment with greater caution. Second and third-generation families prioritize wealth preservation, typically allocating only 20-30% to alternative investments. They prefer opportunities closer to maturity, such as pre-IPO companies likely to list within three to five years, with much smaller allocations to early-stage ventures.
Beyond private markets, new-age entrepreneurs maintain significant liquid reserves, having experienced years without liquidity during their startup journeys. This portion gets allocated to public equities through mutual funds, alternate investment funds (AIFs), or direct stock purchases. Conservative fixed-income avenues, including high-yield debt and private structured debt, also feature in their portfolios after accounting for lifestyle upgrades like premium real estate acquisitions.
The emotional connection founders maintain with their company stock presents unique challenges. "They don't view their own shares like an investment—they view them like a home," Shanker noted. While some founders participate in block deals to diversify, others actively buy back stock during market downturns, demonstrating lasting attachment to their entrepreneurial creations.
Global Diversification and Future Plans
These millionaires actively seek global diversification, having traveled extensively and interacted with international investors. Many pursue dollar exposure for currency diversification, typically without hedging to maintain hard currency assets. While Liberalised Remittance Scheme (LRS) limits present constraints, they increasingly explore GIFT City structures that permit deployment of up to 50% of net worth.
Global private markets, particularly in emerging areas like artificial intelligence, attract significant interest, often accessed through networks built with foreign investors during their own funding rounds.
Many young founders who exit their companies maintain liquidity for second entrepreneurial innings, either returning to entrepreneurship after lock-in periods conclude or focusing on scaling existing businesses while keeping reserves for future ventures.
Evolution of Wealth Management Services
The rise of first-generation wealthy entrepreneurs has fundamentally transformed wealth management operations. Motilal Oswal has significantly expanded its private market platform, strengthened research capabilities across the startup maturity chain from Series A to pre-IPO, and applied for its own Category II AIF license to build fund-of-fund and co-investment sleeves.
"We've become more solution-oriented, more consultative and more deeply embedded in the startup ecosystem," Shanker emphasized. The firm now invests heavily in training wealth managers to work effectively with founders, often establishing relationships years before liquidity events through direct funding of their companies.
As India's startup ecosystem continues maturing, these first-generation millionaires are reshaping investment landscapes, bringing entrepreneurial risk appetite to wealth management while maintaining deep connections to the innovation economy that created their fortunes.
