Selling a company is a monumental milestone for founders, marking the start of a brand-new chapter. And while the period after an exit can be full of exciting opportunities, it can also bring its own set of challenges and tough decisions.
After selling a start-up, founders face the exciting yet complex task of managing their newfound resources wisely. This means not only investing their money but also planning for the long term and setting clear personal goals. An exit marks a fresh beginning, not an end. Whether a founder chooses to invest in new ventures, give back to the community or simply take a well-deserved break, there are many ways to make the most of their new situation.
Dominic Berner, Relationship Manager at LGT Private Banking, offers this advice: "The most important thing for people who have exited their company is to establish a solid foundation for a new start. Many founders have very little time to consider their personal financial future before selling", he says.
This makes it all the more important to plan for a new personal structure during - or even before - the sale process. "They should set milestones and work through them, and quickly rebuild structures that offer a stable basis for making new decisions."
Christian Ortner, Relationship Manager at LGT Private Banking, compares a founder's situation after an exit to that of a professional footballer seeking a new club: "You listen to what other clubs are prepared to offer you and then decide. If you have a good feeling about it, you shouldn't hesitate."
Relationships are often the key to success. Why? Because a strong network can open doors. Whether they decide to become an investor, a mentor or something entirely different, keeping in touch with former colleagues, investors and partners will help founders uncover new and exciting opportunities.
After a sale, many founders are eager to put their proceeds to work. Christian Ortner says, "The first thing I recommend that founders do is have three conversations with people in their network with whom some or all of the proceeds could be invested." In addition to traditional investments like shares and real estate, founders should also explore private equity and sustainable investments.
"Financial experts can help founders define their goals and risk appetite. It's also important to identify any potential tax-related issues in order to avoid unpleasant surprises further down the road", adds Ortner.
Selling a company can be an emotionally challenging experience. Many founders feel a sense of loss or a lack of direction after leaving their company. The sudden change after years of hard work and losing their daily routine can be stressful.
Tom Diesbrock, who advises managers and founders who are looking for a new challenge, recommends taking time out after an exit to find new inspiration and experiences. Whether that means a few months or several years depends on the individual, he says.
Some founders choose to take a break to travel and spend quality time with their family to clear their minds, which can be helpful in determining next steps. Others are eager to tackle new challenges, invest in the next venture or perhaps even acquire a stake in a new company. In a talk with the Viennese consulting firm "Brutkasten", Nic Vorsteher, founder of the Austrian HR start-up Prescreen, said that he could have, "retreated to a quiet life in the mountains somewhere, managing my portfolio." Instead, he decided to jump back into the fray with the ambition to achieve something even greater.
Some founders decide to channel their post-exit energy into a completely new project. Lea-Sophie Cramer is a prime example. After leaving Amorelie in 2019, the successful German entrepreneur embarked on a "year of learning" that ultimately led to the launch of Ten More In, a coaching programme for women in leadership roles. Others use this period to pursue social or philanthropic goals.
Many founders ultimately transition into roles as business angels or venture capitalists. By investing in emerging companies, they can leverage their experience in ways that make a real difference while enjoying the rewarding experience of watching new start-ups flourish. This can also provide strategic avenues for deploying capital, as exciting opportunities frequently emerge on business angel platforms and within investor networks.
Amid all of these exciting possibilities, founders should not overlook the importance of robust wealth planning. This is crucial, as their financial structures are often complex, and can become even more so after an exit, with assets spread across their own ventures and third-party companies, and sometimes also across different countries.
They should also consider their family situation, as many founders are young, have just started a family, or plan to do so. Effective family governance is crucial to preserving long-term family ownership of companies, or stakes in companies, avoiding conflicts, upholding family values and growing wealth across generations.
