Life after exit: Should I stay or should I go?
The Helm community includes lots of successfully exited founders. Everyone’s exit journey is unique, but there are certain patterns we have seen. There are founders who exit (usually via a partial exit) but remain in more or less their old role within the same business, even as it has a new full or partial owner. Others stove around just for an earn-out (where the new buyer wants to get their input to ensure a smooth transition). Yet others depart the first business (sometimes taking an advisory or non-exec role in it) only to immediately launch a new one.
All the above are usually more or less comfortable with their decisions. The last group we see are those who sell up, leave the business they built and only then think about what’s next.
This group are the ones who experience something closest to what might be called seller’s remorse. It can even develop into a full-blown, existential identity crisis, at least in the immediate aftermath. Having worked flat out for years growing the business and having potentially worked even harder to simultaneously keep it running it while going through the exit process, there can be an “off the cliff” moment as everything stops.
Having taken a short break to recharge batteries, played a few rounds of golf, games of tennis and been on some long walks and/or bike rides, they realise they’re suffering from a strange sense of not knowing how to handle all this spare time.
Those who stay in a business are either in it for the long haul (often with a stake in the new entity) or bound into an earn-out. They always have eyes on a further “event” or sale in the future. Having engineered a sale of all or some of their business, and taken “money off the table”, those who retain an interest in growing the business further still, have a role to perform and are happy to expand things further with the support of a new investor.
So how do you decide whether to stay or go?
The above would suggest that in the event of a full or partial exit it’s always better to stay involved. This is patently not true. There are plenty of miserable “exiteers” who have been left stuck in a business. Even a four-year earn out can feel like an awfully long time when you may not have a real role to fulfil.
What connects all those Helm members who are happy and settled after an exit is that they saw the decision to stay or go as something to consider from the start of the exit process. If you really want to stay, it should shape the type of deal that you look to do. Maybe a partial sale would be better than a total exit. It will limit and shape who you can turn to for investment. Any new owners and the Founder have to agree to work together and agree the terms of that deal. Problems only really arise when a Founder springs her desire to stay as a condition of sale later in the process. That can be avoided by getting the right advice early on (something we always advise). A well-advised, well-ordered sale helps everyone get what they want.
For those with a second business already on the blocks, Exit can release funds to help them turbo charge the new enterprise. These folk often seem the most certain of our exit community. What second-time Founders lack in the drive and motivation compared from the first time (when they were younger and hungrier), they compensate for by being confident in what they’re doing. Many also setup something either more philanthropic or closer to their heart, and many seem to be having more fun the second time. There are few money problems and little of the stress they experienced first time.
The message seems to be clear. Plan your life after exit as meticulously as you planned the growth of your business. See life after as a serious project that needs proper planning. Talk to others who have been there and done it. Learn the lessons they learned without having to make the same mistake.
While very few members really regret a decision to exit, a surprisingly high proportion find themselves at a loss in the immediate aftermath. Some regret the decision to leave after sale.
The loudest message to come from the Helm exit community is the value of preparing for life after exit before the exit. Seek out networks of other exited Founders (coughs, yes that’s a shameless plug for ourselves) and discover what they’re doing with their time and money; find out what new skills they’ve learned or required and how their existing expertise has been useful. While for many Founders life begins after exit, it doesn’t begin by accident. Applying the same ruthless energy and determination you put towards growing a business to planning what to do after you exit it is the best way to make sure you make your exit as successful as your business.