The Dark Side of a Successful Exit

I conducted research interviewing founders who had successful exits and uncovered something I did not expect at all. 

One of the founders I interviewed had sold his company after 11 years of scaling it and preparing for the sale, made more money than he anticipated, and a few days after the deal finally closed, he sat at his kitchen table looking at multiple zeros in his bank account but felt nothing at all. Within a week, he could barely get out of bed. He had assumed the sale would be one of the best days of his life, and he could not understand why it was not.

I heard versions of this from almost every founder I interviewed as part of my research, and what they told me matches what we see in surveys of exited business owners. 

Over the next decade, 73% of privately held businesses in the United States are expected to change hands, a $14 trillion transfer of wealth. Most of the people selling those companies expect it to be one of the happiest events of their lives, just as the people I interviewed did. And yet, roughly three in four of them will regret it within a year, even if they sell on their own terms at their target price.

What my research revealed

For my research, I spent months interviewing founders across North America who had sold their companies and considered the sale a clear financial success. I wanted to dig deeper into the emotional journey they went through afterward, as well as their journeys of reinvention.

What I found is that most founders face a feeling of loss after the sale and, unanimously, they all told me that it seemingly came out of nowhere and was not something they ever saw coming. Most importantly, they hid their emotional struggles from others, not wanting to appear unappreciative of their success or to have what one of them called “champagne problems.”

Unanimously, they were surprised to learn how common the feeling of emptiness and loss post-exit is among founders. For years they’d thought they were alone in feeling anything other than elation and pride.

What I’ve learned is that the exit process focuses entirely on the numbers and the structure of the sale. Exit advisors help founders push up the valuation, structure the deal, handle the tax and hand the operations over cleanly. All of that is necessary, and I would even say crucial, yet all of it is entirely about the transaction. None of it is about the founder.

The deal closes, and whether you have an earnout period or not, you wake up the next day in an entirely different role. Whatever you got used to as the owner of your business is no longer the same. And for many founders, the journey of transition and reinvention is emotionally complex.

Understanding the emotional impact 

The reason behind the emotional impact is fairly clear. When you run a company, being the founder is a huge part of who you are. It is how you introduce yourself and what you tend to identify with the most, at least on the professional level. Founders build much of their sense of self around the business they run. When the business is sold, that part of your identity is suddenly gone, and you feel that loss regardless of how much money you made.

The founders I interviewed went through the emotional stages that usually follow any serious loss. What surprised me most was how consistent those stages were with the typical stages accompanying grief. It was unexpected, as we tend to associate grief with negative events — death, divorce, loss of some kind.

What we don’t realize is that a business exit also represents loss — loss of identity and loss of something you had which you no longer do. Most of the founders in my study went through a period of depression after the sale, whatever the size of the deal and however carefully they had planned.

Even though many of them did not name it as such, their descriptions of how they felt matched the symptoms of depression: suppressed mood, low interest in activities that used to energize them, even changes in their sleeping patterns. Many of them missed the daily intensity of running a company and could find nothing in the immediate period that followed that came close. As I already shared, these were all founders with financially successful exits, and yet money made no difference to any of this.

One of the most interesting patterns in my research was that founders did not all struggle with the same thing. What each person missed after the sale matched why they had built the company in the first place.

The founders who were motivated by winning missed the competition. Running the company had given them a way to measure themselves against others and to prove they were the best at what they did. After the sale, that was gone, and several of them told me they felt useless and invisible even in a way they never had before.

The founders who were driven by the people around them missed being needed. Their sense of purpose came from showing up every day for a team and a group of customers who depended on them. Once that ended, they felt aimless, and no amount of free time or travel seemed to help.

One founder had built her company to advance a cause she cared deeply about. After she sold it, she was financially secure, and the cause still mattered to her, but she no longer had a way to act on it.

Getting emotionally ready

After enough of these conversations, I could almost predict how a founder would feel after selling, simply from hearing why they had started their business in the first place. 

The most useful thing I learned was that the importance of getting ready emotionally for the sale is as important as getting the finances and the legal work right, and it might take far longer. 

The founders who adjusted best had something in common. Long before they sold, they had a life and an identity that did not depend entirely on the company. Some had a serious hobby, some a coaching or advisory role, some a second business already starting. Because their identity was bigger than the business they were selling, they were able to leverage that part of the identity to rebuild faster.

As entrepreneurs, we celebrate successful exits. And we should be. Building a scalable business that someone is willing to pay millions of dollars for is a feat few manage to accomplish. And yet, we almost never ask how the founder is doing a year later, once the celebratory calls have wound down and the money has been in the bank for a while. In my study, every founder had succeeded by any outside measure, but most had struggled privately with a question no one had helped them answer, which was who they were now that they were no longer a business owner.

I believe that an exit is only truly successful if the founder is doing well in the years that follow it, and I believe that it’s a topic we should spend more time discussing. To me and other people in the exit space, this means helping founders get ready not only financially and legally but also emotionally.

I conducted research interviewing founders who had successful exits and uncovered something I did not expect at all. 

One of the founders I interviewed had sold his company after 11 years of scaling it and preparing for the sale, made more money than he anticipated, and a few days after the deal finally closed, he sat at his kitchen table looking at multiple zeros in his bank account but felt nothing at all. Within a week, he could barely get out of bed. He had assumed the sale would be one of the best days of his life, and he could not understand why it was not.

I heard versions of this from almost every founder I interviewed as part of my research, and what they told me matches what we see in surveys of exited business owners.