Instead of bars and restaurants, saunas are the new place for investors and founders to socialise and raise money
3 min
When tens of thousands of software engineers, tech enthusiasts and salesmen descended on San Francisco for the annual Salesforce mega conference in September, startup founder Jari Salomaa had an idea: What if he rented out a sauna?
Salomaa was looking to pitch his startup Valo, which has built an artificial-intelligence tool that helps users on Salesforce’s platform. But an anti-alcohol movement that’s sweeping through the tech industry is disrupting work gatherings that revolve around drinking or eating. That’s leading Salomaa and others to try “social saunas,” where networking happens inside a steamy 200-degree box. In bathing suits.
The experience can take some getting used to. Bathrobes and bikinis can be distracting. It’s also very sweaty.
But investors and venture capitalists say it’s refreshing to have someplace other than a bar to gather and that business is getting done everywhere from a pop-up sauna in a Napa vineyard, to an 80-person sauna in New York.
Salomaa, 46, grew up in Finland where the sauna was part of everyday life and at his first job for Nokia in Helsinki, saunas were built inside the offices.
“There are more saunas than cars in Finland,” he said. “As many saunas as toilets.”
Still, he worried how Americans would react to hanging out in their bathing suits for a corporate event. “Scandinavians are more at ease with body images than the average American,” he said.
He thought about having one event for women and another for men, but the planning soon got complicated. In the end, Salomaa decided on a sort of social experiment: a coed gathering in San Francisco. He wound up with a wait list of 100 guests.
Salomaa imposed some sauna etiquette—bathing suits required and stay hydrated. And he started the event like any other investor pitch, by giving a PowerPoint presentation to an audience clad in bathrobes.
Attendees shared images of the event on social media, and soon Salomaa was fielding calls from friends in the tech industry, asking how they could do a similar event. He’s eager to help, but maintains some reservation about moving too much work inside the sauna.
“If it’s all talk about work, it kind of kills the vibe,” he said.
New social saunas have popped up in San Francisco, New York and Colorado this year.
They are built with stadium seating to fit more people—usually around 20 to 40 people—and conversation is often encouraged.
At Othership, a new sauna facility that opened in New York City’s Flatiron district in July, the sauna can fit up to 90 people. Lined with ambient lighting that can switch from warm red to neon pink, the sauna looks more like a nightclub than a place of tranquility.
Founder Robbie Bent, 40, said young tech founders make up a large part of his clientele. “They want to be healthier, meet like-minded people, and often don’t want to be out late,” he said.
The company hosts founder nights, as well as events for investors and founders to mingle. Othership says tech companies big and small are considering offering its services as a benefit to employees.
Othership has also offered to organise complimentary “team sweats” as team-building exercises. But according to Bent, they received pushback from human resources at companies across tech and Wall Street. Colleagues congregating in bathing suits wasn’t going to fly.
In response to these critiques, Bent designed a “corporate swimsuit”—basically a full-body rashguard for people to wear in the sauna.
Will Drescher, 29, built a social sauna in Boulder, Colo., after going to one in Minneapolis this year. “Neither me nor my co-founder drink,” said Drescher. “And we just thought, why don’t we have this?”
They built Portal, a “more DIY” option than the saunas popping up in New York and San Francisco, said Drescher.
“We wanted to bridge what’s happening in the coasts with what we’re seeing in the middle of the country,” said Drescher.
Venture investor Helene Servillon, 35, proposed a meeting with a founder of a tech company at Portal.
The meeting lasted an hour, which allowed them to cycle in and out of the sauna for three sessions. After learning more about the startup, Servillon said she plans to invest in it soon.
“VCs socialise a lot. If we only have two options—have a drink or a meal—that can just get really exhausting,” she said. When founders or investors ask to meet for happy hour these days, she will often counter-propose with a sauna or a hike.
Fintech investor Sheel Mohnot, 42, co-hosted an August social sauna event in San Francisco and attended an investor event in Napa, where a mobile sauna was wheeled on to the vineyard.
“The reality is there are always chances for people to feel uncomfortable, and more people are feeling that way about drinking,” Mohnot said. “We just didn’t have great sauna options here before.”
Not all tech workers have bought in. Laila Danielsen, chief executive of an AI software company, was invited to a social sauna event in October. She enjoyed the event and the environment it provided to have conversations, but she didn’t go into the hotbox.
“I don’t know if I’d necessarily put on my bikini to go out and pitch a VC, you know what I mean?” the 55-year-old said. “I’ll consider meeting them at the sauna after we close the deal.”
Copyright 2020, Dow Jones & Company, Inc. All Rights Reserved Worldwide. LEARN MORE
BNW Developments has established a Sydney presence, joining Arada and Sobha Realty among the growing number of UAE developers pursuing Australian buyers and development opportunities.
The Australian leather house has opened an immersive four-day pop-up in Manhattan, unveiling its Bloom Collection and redefining what a product launch can look like.
Strong family financial planning can help reduce taxes and support younger generations. From intrafamily loans and asset gifts to inheritance disclaimers, strategic cooperation can create meaningful financial benefits—when families have the trust and structure to make it work.
4 min
Happy is the family whose members—parents, grandparents and grown children—trust each other enough to cooperate on shared goals, especially financial ones. When that is truly the case, Uncle Sam’s tax rules can help as well.
This matters especially now that mortgage rates are above 7%, and many families are looking for ways to help younger members. If the elders have resources and are confident younger ones can cooperate, a family loan could make homeownership possible while providing the elders with a useful income stream.
Other strategies can actually lower taxes, such as when funding 529 plans or Roth IRAs, or when someone inherits a traditional IRA with required withdrawals larger than they will need.
Here are three strategies useful for functional families.
It is perfectly legal for families to lend money to a relative for a down payment or even a private mortgage.
But it is important not to cut corners, says Ryan McKeown, a CPA with Modern Wealth Enhancement in Minnesota. If the loan is for a down payment, be honest with the mortgage provider and have a formal agreement. The lender owes tax on the interest payments received.
If the loan is for a private mortgage, both sides should have legal representation with a formal written agreement, including payment terms. The lender owes tax on the interest, and the borrower often can deduct it if he or she itemizes.
To avoid IRS trouble, the interest rate shouldn’t be lower than the agency’s Applicable Federal Rate at the time of the loan. Currently that is about 5% for loans longer than nine years; about 4.5% for loans three to nine years; and about 4% for loans three years or less. Currently, traditional mortgage rates are generally above 7%.
In addition, the lender could use the $19,000 annual gift-tax exemption (described below) to forgive some or all of the interest or principal annually. If both lenders and borrowers are married, that is up to $76,000 a year. There is no tax for the borrower on such forgiveness, because it is from a gift.
If you’re going this route, McKeown advises against having a fixed plan to forgive the debt. Instead, do it in one-off letters specifying the amount—and keep careful records. Otherwise the IRS might try to treat the loan as a taxable gift.
Powerful tax-saving moves for families often use gift-tax provisions. Under current law, anyone can give anyone else up to $19,000 of assets annually, free of gift tax. That means a married couple with three grandchildren could give them a total of $114,000 in 2026.
The gifts can be cash or other assets, like stock. For noncash gifts, the cost basis—which is the starting point for measuring taxable gain after a sale—“carries over” to the recipient. So if someone buys $1,000 of stock and gives it away when it is worth $5,000, the recipient’s cost basis is $1,000. If the recipient later sells the shares for $8,000, the taxable gain is $7,000.
Here’s an example showing how gifts could save a family taxes. Grandma is a widow of modest means, while her child and spouse have prospered. The couple has two children, and they want to contribute $5,000 to a 529 college-savings plan for each—but they need to sell stock to do it. Their tax rate on the sale would be 18.8%, and they would need to sell about $11,000 of stock.
However, Grandma’s federal tax rate on the stock sale is 0%. If the couple gives $10,000 of shares to Grandma, she could sell them, pay no tax, and fund the grandchildren’s 529 plans. This saves about $1,000 of tax.
These moves are legal, and they could be used in other ways, such as to help a young person fund a Roth IRA.
But trust among family members is essential: Under the law, givers can’t put conditions on a gift. Grandma could use her stock proceeds to take a cruise, but she makes 529 contributions instead.
Mark Sellner, a retired tax attorney and CPA living in Sarasota, Fla., uses this strategy. His children sell stock he gives them and fund 529 plans for his grandchildren.
The family’s tax savings aren’t huge, but he likes other benefits. The sales by his children don’t boost his adjusted gross income, which in turn could raise his Medicare Irmaa premiums or his 3.8% surtax on net investment income.
Sellner doesn’t worry about his children using the funds for another purpose.
“There can’t be any strings attached to gifts. Of course, it is up to us to decide whether to make them in the future,” he says.
Two caveats: The “kiddie tax” applies to most children under age 24, and it is levied at the parents’ rate on investment income above $2,700 in 2026. Consider this before making gifts to a young person.
Investors who give away stock also forgo the step-up, an important provision that exempts assets held at death from capital-gains tax.
Sellner knows he’s losing a step-up, but says, “The children could use a little more now. Why should they wait 20 years to get it?”
A disclaimer is a highly useful strategy in which one heir renounces an inheritance in favor of another heir. Assuming family members cooperate, this can save taxes.
Here’s one example. Dad died and had a large traditional IRA that he left to Mom. She has enough assets and income to cover her expenses, and she lives in a state with a stiff estate tax. The inherited IRA would put her estate over the threshold.
Also surviving are three young-adult children. If Mom disclaims all or part of Dad’s IRA within nine months of his death, that amount could go directly to the children. They will have 10 years to empty the account, and the family as a whole will likely save estate and income taxes.
Disclaimers have many key details, especially regarding beneficiary documents. Although heirs have great freedom in choosing what assets to disclaim, the rules about who gets disclaimed property are rigid. It is best if the original owner names tiers of heirs so that if one disclaims, the next recipient is clear.
