Selling Your Business? Watch Out For The Post-Exit Blues

Exiting a business you’ve built from scratch can be an emotional experience for any entrepreneur, no matter how lucrative the deal is. Having braved a journey fraught with challenges, worries, and hard graft, the impact of a sale can create feelings of loss, or even grief, resulting in what is often referred to as the ‘post-exit blues’.

And while there’s plenty of support available for founders while they’re growing their startups, there’s little available for those going through an acquisition. It’s a situation that Eamonn Turley, CEO of insurance firm Multi Quote Time, has experienced first-hand. He describes selling a company as ‘a profoundly personal bereavement into one’s self-worth’.

He says: “My sale was a watershed moment, full of conflicting emotions. I felt relieved and depressed at the same time; relieved in the sense that my years of hard work had been rewarded but depressed about severing my most intimate professional connection. This complexity is universal among entrepreneurs because they see their businesses as more than just commercial entities-they are extensions of themselves.”

Money doesn’t buy happiness

Turley is not alone. According to David B. Horne, founder of Add Then Multiply, and an expert in business growth and mergers and acquisitions, the post-sale blues affect many exited founders.

He says: “Many founders look upon their business as an extension of themselves and their family, and they can have as close a relationship with their business as they do with their family. Sometimes closer. As a result, when the deal is done and the company has been sold, founders can feel like they have sold off a part of themselves or their family. It can be a real emotional wrench.

“The money they receive from the sale can go some way to addressing this, but they must still work through those feelings. Sure, they can buy new homes or cars or yachts and go on fancy holidays, but I’ve seen many cases where they soon get bored of these ‘trinkets’ and long to go back to what they know and love. As the old saying goes: ‘Money doesn’t buy you happiness’.”

After the sale

Often, following the sale of a business, the founder stays on with the acquiring company for a certain amount of time, which can make the final wrench away from the startup on which they’ve expended so much of their time, energy, and life just as difficult.

“In some ways, it makes the transition harder because in between being the founder and being the exited founder with a pile of cash lies a period when the founder is now an employee in someone else’s business,” says Horne. “Having been in charge of their own business, making the important decisions and calling the shots, this can be the most challenging thing they have had to deal with.”

When they do make their final departure from a company they have sold, the post-exit are no less challenging to deal with, as Ben Doltis, cofounder of M&A advisory firm PCB Partners, discovered.

He set up his first business, an executive search firm focused on exec-level hiring in IT Services, in 2003 at the age of 21. Eight years later he acquired his first company in 2011, doubling the size of the group in revenue and EBITDA. In 2013 he sold both businesses to the ManpowerGroup, one of the largest staffing firms in the world. And he was completely unprepared for how the experience affected him.

After the sale, Doltis spent several years working in the business, as part of the ManpowerGroup, which he enjoyed. He says: “They were great to work with and they respected my autonomy and independence. But eventually, I knew it was the right time to go. That’s when the post-sales blues hit. I’d created a business, built it, sold it. And now I had to let it go and that was hard. I knew it was in safe hands, but I felt a strong sense of loss.”

Post-exit coaching

It took Doltis a few years to fully understand those emotions and emerge from the experience, and it became the catalyst for his desire to help other like-minded entrepreneurs in the sectors he knew – IT services, marketing services and the HCM/recruitment ecosystem – with the sale of their businesses. The result was the launch of PCB Partners.

He says: “I wanted to ensure that entrepreneurs found a great buyer but were also able to cope with the post-sales blues. I felt it was important that they worked with a corporate finance advisor who had been through that journey, experienced all the emotional ups and downs and could empathize. They need to understand that the sale of their business is far, far more than just a financial transaction.”

The transactional and emotional support offered by PCB both before and after a sale proved crucial for Daniel Fox when he sold Trilogy International, a business he founded with partners Jamie Bernstein and Ivan Jackson, to Korn Ferry in 2015.

“Being forewarned is forearmed,” he says. “The coaching from PCB, who was also our exclusive sell-side advisor, was important. It was a mix of both formal and informal coaching around finding the right buyer and getting everything in place so that there would be no emotional fall-out.”

The psychological preparation for selling a business is as important as the financial preparation. To soften the emotional blow, Turley recommends three key strategies.

He says: “First, entrepreneurs should recognize and legitimize their emotional reactions: it is normal and even healthy to feel a sense of loss. Second, they should look at the silver linings from the sale, including security through finances, new prospects, or personal development. Third, keeping their eye on the future through planning for the next phase of their professional life will give them the much-needed emotional ballast in this transitional stage.”

The post-exit blues are a normal reaction, and founders need some space to process those feelings. However, they should also think about why they are selling. In many cases, exiting a business opens a door to new opportunities, from starting a new business to simply taking some time out to appreciate the rewards of all their hard work.