Beyond the money: Post-exit reflections
As a founder, at some point in your journey, you’ll be pondering the notion of an EXIT.
"Who could buy my business?", "how does it all work?", "what's the most important aspect of selling….?" Are all likely questions worthy of reflection.
From the outside, as the most discussed element, it can seem to be mainly about the money paid. But please believe me, when your exit happens it is NOT all about the money. Whilst it seems the most important aspect at the start of the deal, it rarely ends up that way a year or two post-exit.
The most lessons learned post-exit:
1. The Letter of Intent (LOI) offer is rarely the number paid - this ends up being marginally or substantially lower once the pain of DD is complete. Everything identified as a ‘problem’ in DD will be deducted from the price.
2. Being ready for DD has a huge impact on the owner's well-being, experience and price paid. Having the business hygiene factors covered before even considering a sale is worth its weight in gold. Invest in a data-room early and delegate all the information collection to someone less senior than you. You’ll thank me for this one day.
3. The earn-out is hell. Having to be around while your business is pulled apart (staff experience, customer experience, brand etc) and your stakeholders being treated in a way incongruent with how you’d do it - is tough. For many, they actually walk away during this time - leaving sometimes substantial dollars on the table. “It’s just not worth it”.
4. Who are you anyway? Its quite possible your identity is tied up in the businesses - for me personally and with my first business - my identity was intrinsically linked to the business! It was hard moving on with my life once I’d sold. Many report going through some form of crisis post-exit as their identity was tied to that of the business; become familiar with ‘founder’s remorse’.
5. Where to from here? I realised I lacked purpose outside of business. I’d made my business the #1 priority in my life, and I felt kind of empty without it. Its super important to create things of meaning in your life before you sell your business.
Think about this as a DJ cross-fader; one side is terms, the other is money. You can have the best terms and less money, or the other way around. Or to quote Oprah: “You can have anything you want, just not all at once!”
Cheers,
Josh
"The price of anything is the amount of life you exchange for it."
– Henry David Thoreau
"Wealth consists not in having great possessions, but in having few wants."
– Epictetus
As an exit-focused post…..some questions that could help:
What is your life-changing number? If you think deeply about it, it’s probably less than you think. Most founders I know tend to have built the lifestyle they want, and amassing another $xx million won’t really move the needle for them. Forget vanity metrics, I’d encourage you to think about the above points, plus reflect on impact.
What could you make your life about after selling your business?
How do you assess the value you bring to the world?
What positive change has your business had on the world?
What change would you like to see in the world?
