Life After an Exit: How Entrepreneurs Transition to the Next Stage

Entrepreneurs are different from other people. Their talent lies in imagining a new solution or a fresh approach that gives the world something it may not have even realized it needed. Building a successful enterprise from start-up to sustained profitability demands total immersion. The company becomes the entrepreneur’s purpose, identity, primary community for relationships and the main and most meaningful way he or she spends time. Sometimes the company is passed on to the next generation, leaving a legacy that reinforces the founder’s identity and purpose. However, more often, the company is sold. What happens in this case? A sale may result in a financial windfall, but it can also leave the entrepreneur rudderless, facing a big question: What comes next?

This white paper fills a gap in the writings on major liquidity events and the issues they create for the newly wealthy. A number of books and articles address the dynamics of transition and self-reinvention. Others deal with wealth creation via circumstances that include inheritance, legal settlements and successful investing. However, virtually none focus on the specific issues that entrepreneurs face following the sale of their business.

Our goal in this paper is to provide entrepreneurs with perspective on two kinds of challenges after a sale: those they will face as they move on to the next phase of their lives, and those they will face as they learn to manage their new wealth. Our hope is that entrepreneurs contemplating an exit will benefit by having a fuller understanding of what could lie ahead. We also hope it is comforting to entrepreneurs who have recently sold companies and are wrestling with these challenges to learn how others have managed the transition.

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