Dealing with the Emotional Fallout of Selling Your Business
“Congrats on selling your business,” a longtime mentor said the day after I signed the paperwork. “Now get ready for a depression.”
That was seven years ago. At the time, I was confused by this remark. I had just made what felt like a pile of money, achieved a long-term goal of building and selling my business, and was about to spend the coming months traveling abroad, one tropical country at a time. Depressed? Hell no!
This memory came to mind as I read a series of melancholy tweets from Markus Persson this past weekend. Markus, a 36 year-old Swede who goes by “Notch,” was the creator of Mojang AB, the company that created the popular game Minecraft. He sold it to Microsoft for $2.5 billion in 2014.
He tweet series began: “The problem with getting everything is you run out of reasons to keep trying, and human interaction becomes impossible due to imbalance.”
He continued: “Hanging out in ibiza with a bunch of friends and partying with famous people, able to do whatever I want, and I’ve never felt more isolated.”
His tweets continued in this vein, and the internet responded predictably with “poor rich guy” mockery as well as genuine offerings of support.
Understandably, it’s hard to feel sorry for a newly minted billionaire tweeting from Ibiza. Yet Persson’s tweets give voice to what many entrepreneurs feel following the sale of their businesses: isolation, a lack of purpose, a sense of drift.
It seems obvious in retrospect. When you spend years architecting your life around a business and suddenly it’s gone, you’re probably going to have an identity crisis and some post-partum depression.
What’s more, sudden wealth can shape the dynamics of relationships, especially if it’s a large windfall like Markus’s. Thus his comments about “imbalance.” Markus later tweeted about meeting a girl who “felt afraid of me and my lifestyle, and went with a normal person instead.” Even for those with much smaller exits, there are mundane questions: How are you going to respond when family members ask for money? How will this impact friendships?
Then there’s the issue of purpose and motivation. Without the constraints of money and responsibilities of your business, what will be your “reasons to keep trying” as Persson put it? The freedom of being unanchored sounds great, but it comes with the potential of drift and lack of motivation.
These issues don’t mean you shouldn’t proceed with a sale, just that you may want to prepare for the emotional journey afterwards. With the benefit of hindsight, here are some suggestions:
Learn from others’ experiences. There’s remarkably little literature on the post-exit experiences of entrepreneurs. Thankfully, Barbara Roberts of Columbia Business School and Tiger21, a financial peer learning group, recently wrote two reports documenting the real-world experiences of entrepreneurs following the sale of their businesses. Check out “The Owner’s Journey” and “Life After An Exit.” (Disclosure: both were sponsored by banks.)
Also, you may want to reach out to people in your network who’ve been through a sale. Take them to lunch and ask them about their experiences.
Accept that this will be a reinvention process. Selling your business may be the pinnacle of your career, but the emotional experience is similar to retiring or quitting a job you’ve loved. Before signing the papers, make sure you consciously accept that this will be a process of transition and reinvention, and that it won’t always be peachy. Mourning and drift may be part of the journey, and getting back to “flow” may take longer than expected. For guidance on navigating a reinvention, check out the books Chapters by Candice Carpenter and LifeLaunch by Frederic Hudson.
Develop a game plan for the first six months. Think of this as the flip side of succession planning. While you can’t plan your way through a reinvention, you don’t want to wake up the day after selling your business thinking, “OK, now what?” I recommend developing a simple game plan for the first six months following your exit, with between three and five areas of focus. This way you have some structure the day you leave.
Here’s an example from one of my coaching clients:
1. Get my personal finances in order.
2. Coach my son’s baseball team.
3. Take the family on an extended vacation to Hawaii.
4. Hire a Spanish tutor, relearn Spanish.
5. Explore local non-profits and angel groups.
Based on this plan, he developed a simple schedule for the initial period following his exit.
Join a community or peer group. Many entrepreneurs overlook the psychic benefits of their companies, particularly the sense of community and purpose. For this reason, I recommend identifying a community or peer group to join. It might be taking on a position at your church or a non-profit. Even better would be to find a group with others who’ve been through this experience. Tiger21, for example, is a group with many “post-exit” entrepreneurs. Your local angel groups and investment clubs may have some too.
Get a coach. At a time when most people are focused on either your business or your money, you want someone on your team who can advocate for you as a whole person, act as a thought partner, and provide some guidance and structure through the transition. For this reason, I recommend hiring a coach. Find someone who has either gone through this process or helped others through it.
Avoid making too many changes at once. After selling my business, I sold my home, started a new relationship, and moved to New York City within a matter of months. In retrospect, it was too much change at once. It shook my identity.
When selling your business, it’s natural to think of other major life changes to make — like moving to Montana or buying a new home. Selling and leaving your company is enough change to handle at once. I recommend waiting six months for any other major changes.
Develop a healthy relationship with money. It’s hard not to look at Markus and see that the “imbalances” he complains about are largely of his own creation. This is the guy who bought a $70 million house in Beverly Hills and parties with celebrities in Ibiza.
You don’t have to spend like a cartoon of a wealthy person. It’s understandable to reward yourself, but keep in mind the bigger picture: What is the purpose of money in your life? The sooner you resolve this, the better off you’ll be.
Get curious. I like the way Anil Dash replied to one of Markus’s tweets: “Ibiza was demoralizing because it’s full of people who have resources but no purpose. You need the opposite.”
After years of intense focus on building your company, it may feel weird to suddenly be “heads up” and open to new possibilities. Rather than fighting this, try to embrace this as a period of exploration. What are you curious about? What are you grateful for? According to Barbara Roberts, it typically takes an entrepreneur 5-7 years to get back in “flow” after selling their business. But those in-between years could still be the greatest growth period of your life.
Jeff Giesea is an entrepreneur and executive coach based in Washington, DC.
