Asset allocation has a lot of moving parts, even for ordinary investors. How much you decide to invest in bonds and equities depends on a host of factors, such as your age and how much risk you can take without losing sleep at night. But as an entrepreneur, you also have to feed your business into the calculation, since the state of your company plays a big role in determining how much risk you're already taking.

How to figure the right mix? frontier consulted various investment advisers, including experts at Standard & Poor's Corp. (which, like Business Week, is owned by The McGraw-Hill Companies). The result was an asset-allocation model that gives a rough guide to the proper bond vs. stock allocation.  (Click here to download an interactive spreadsheet version). Generally speaking, the younger you are, or the more stable your company, the more money you can pour into stocks. If you're older, or your company is young or under pressure, you'll want to load up on bonds to cushion the risk.  Here's what goes into the calculation:

Your age It’s the regular drill here: The older you are, the more likely you are to need stable assets like bonds to fund your retirement.

Value of business and personal assets Someone whose company has little market value, or who has only a few dollars in savings, probably shouldn't be placing much money in equities. Leave those volatile Web stocks to people who own mature companies or have substantial liquid assets.

Status of your business Running a startup that has yet to turn a profit? Deduct a few dozen percentage points from your stock allocation. A new startup is more likely to go bust than a mature company that has been steadily profitable for several years.

Your investment style Know thyself: If you're comfortable with risk—and most entrepreneurs are—add a few percentage points back into your equity allocation.

Your time horizon Need money for Junior's tuition next year or for expanding your company? Make sure the money will be there: Pull some assets out of equities to avoid getting caught in a market swoon.

Note that these assumptions are based on the idea that you've already put away enough money in liquid assets (such as a bank account) to cover up to six months of housing and living expenses. If you haven't done that, stay in your office and stay out of the market.

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