The Private Side of an Exit

Part One: The Founder Who Sells

Who am I when I’m no longer the founder?

There is an extraordinary amount of expertise available to prepare a company for sale. Advisers will help the founder understand what the business is worth, make it attractive to a buyer, structure the deal, navigate due diligence, negotiate terms and eventually get the transaction across the line.

Far fewer people are thinking about preparing the founder for who he is beyond exit.

Yet from the moment a founder decides to sell, or somebody approaches him wanting to buy, something has already begun to change. An exit is not an event that happens on completion day. It is a journey, and the person who begins that journey may well be quite different from the person who emerges on the other side.

I find that fascinating, because so much care goes into determining what happens to the company through an exit, while remarkably little attention is given to what happens to the person who created it.

A founder will have spent ten, fifteen or twenty years building a business. During that time, it has inevitably become woven into his life. It has shaped where he goes, who he knows, how he spends his time and what occupies his mind. It has given him purpose, problems to solve, people to lead, decisions to make and something tangible against which to measure his success.

More often than not, it has also become part of his very being.

Then he decides to sell it.

The exit begins long before the deal is done

I think there is an opportunity at the beginning of an exit that is all too often missed.

The commercial questions arrive immediately. What is the business worth? Is this the right buyer? Is now the right time? What are the terms? How much should I retain? How long will I stay? What does the earn-out look like?

There is another conversation worth beginning at exactly the same time. Who do I want to be when this is complete? What do I want my life to look like? What am I ready to leave behind, and who have I become through building this company that I want to take with me?

Because when the deal is done, what he is left with is the money and himself. He doesn't get to take the company.

The years spent building a business have created far more than an asset. They have shaped a person. There will be courage, judgement, resilience, experience, confidence and wisdom that simply didn't exist when the company began. There may also be habits, sacrifices and ways of relating that worked extremely well while building a business and may serve him very differently in whatever comes next.

For me, this is where the private side of an exit becomes particularly interesting. Who has he become through building the company, and who does he choose to become through leaving it?

The transaction ends. The transition continues.

There will eventually be a completion date. Documents will be signed, ownership will transfer and money will move. The founder's transition may continue for months or even years.

If being the founder has occupied a substantial part of his identity, signing a document doesn't suddenly answer the question of who he is without it. If his days have been structured around the company, freedom doesn't automatically tell him what he wants to do with his time. And if the business has been where he experienced challenge, significance, belonging and achievement, selling it can create a space that money alone cannot fill.

Who am I when I'm no longer the founder?

I believe that question is worth asking while you are still the founder. There is an opportunity during the exit itself to begin considering the man who will emerge on the other side of it, rather than waiting until the company is gone to discover who is left.

And there is another transition taking place at the same time.

Success has just changed the circumstances of his life

A founder may enter an exit as a hardworking, successful businessman and emerge from it as a very wealthy man.

There will be excellent advice available about what to do with that wealth. How to invest it, protect it, structure it and pass it on.

Who prepares him for what it means to live with it?

The money can change his relationship with work because he may never need to work again. It can change what is possible for his family, what his children inherit, how he thinks about responsibility and what choices are now available to him. It can change friendships and expectations, and it can alter the dynamic of a marriage that may already have spent years accommodating the demands of the business.

His family goes through the exit too.

Perhaps his partner has lived alongside the long hours, risk, pressure and relentless attention the company required, with an understanding that one day there would be more time. Then one day arrives, and both of them have to discover what they actually want that life to look like.

These are significant changes, yet they rarely appear on an exit checklist.

The financial value of the transaction can be calculated very precisely. The impact it has on the founder, his marriage, his family and the way he sees himself is much harder to put into a spreadsheet.

It deserves thinking about before the money lands.

Who do you choose to be on the other side?

My work is with male founders, CEOs and senior leaders, and this is the part of success that interests me deeply. I am interested in the man beyond the company, the title and the visible achievements, because ultimately he is the person who has to live the life all of this success has created.

There may be another company after the exit, or investing, philanthropy, travel, family and entirely different interests. Those are choices about what he might do next.

I am interested in something deeper: who does he choose to be next?

The transaction will end. The company will belong to somebody else, and the advisers will eventually move on to the next deal.

The founder gets to take himself into whatever comes next.

Who he becomes on the journey deserves to be planned with just as much care as the exit itself.