The difference between an owner's current personal financial resources and the amount needed to fund post-exit lifestyle goals.
The wealth gap is the shortfall between what an owner already has and what that owner needs to fund life after the business. Advisors quantify it in discovery. They start with lifestyle spending, taxes, debt, and legacy goals. They then compare those needs to today's personal balance sheet.
The Exit Planning Institute treats the wealth gap as one of three gaps owners should know. The profit gap compares current earnings to best-in-class peers. The value gap compares current enterprise value to best-in-class value. The wealth gap is the personal number. It tells the owner whether a proposed sale, including cash, earnouts, and rollover equity, actually funds the next chapter.
Do not confuse this with a valuation gap, which is the spread between what a seller wants and what a buyer will pay. Closing a valuation gap is a deal-structure problem. Closing a wealth gap is a personal-planning problem. Both show up in the same transaction.