The Secret Trouble With Selling Your Business
For a dyed-in-the-wool entrepreneur, starting companies may be thrilling (here's Ev Williams explaining that he continues to build companies because it's more fun than being a ski bum), but let's be honest--you're probably also not averse to making a boatload of cash. And in the start-up game that often means selling your company.
So imagine what you've worked so incredibly hard for actually comes to pass. You've sold your company for a tidy sum and you feel…sad?
Hard as it may be to imagine for an early stage start-up warrior camped under her desk, that's the premise of a fascinating article in the Financial Times on the phenomenon of post business sale blues.
For the in-depth piece, Jonathan Moules talks to a handful of founders who successfully sold their businesses about the unexpected feelings of sadness that can follow. It's well worth a read in full, but here, for instance, is James Averdieck, founder of chocolate desert business Gü, on his reaction to offloading his business to Noble Foods for a very healthy £29 million:
Rather than enjoying the many riches the deal had brought him, Averdieck, who readily admits that Gü had become much more than a job, found himself slipping into depression. This in turn damaged his personal relationships and forced him to seek help.
"It sounds ungrateful because Noble were bending over backwards with me to try and make it work," he recalls. "I had money in the bank, but you can only live in one house at one time. You can only drive one car."
Or here's Lara Morgan, who sold her luxury toiletries business, but only lasted a year in the CEO's chair after the deal was struck:
For the first time in your life you feel pushed aside and unimportant, and that hurts. Things go on and decisions are being made but you are no longer privy to those things. You can say to yourself until you are blue in the face that you knew things were going to change, but it is still very uncomfortable.
The article goes on to talk to VCs and other veterans of many sales who testify to how common and powerful the sense of letdown is for entrepreneurs. They also offer tips, including having a plan for life after the deal is done. But much of their wisdom boils down to advice offered by Treehouse founder Ryan Carson, who has sold two previous businesses.
What's his guidance for entrepreneurs coming up behind him longing for a sale and hefty payout to validate their start-up dreams? Life goes on after an exit and even the most successful sale probably won't make you any happier than you were before you were rich. So enjoy the journey and stop fantasizing about the future.
"My advice is to examine your thoughts and see if you're waiting to sell your company in order to be truly happy. The truth is that you're probably already as happy as you'll ever be and selling your company won’t change that," writes Carson on his blog. "Enjoy the adventure that you're currently experiencing and realize the daily highs and lows are what actually make your life meaningful."