Moneywise

The Founder Exit Report: What Happens When You Sell a Company?

49 snips
Nov 4, 2025
Discover the hidden truths of what happens after selling a company. Learn why deal structure often trumps sale price and how earnouts can be a trap. Many founders feel poorer after big payouts due to financial insecurity. Surprisingly, 92% of entrepreneurs return to work instead of retiring. Post-exit identity crises are common, and big purchases often lead to swift regrets. Timing the market usually backfires; satisfaction comes from selling when ready. Lastly, losing control of company culture is a significant frustration for many.
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Prioritize Cash Over Earnouts

  • Opt for cash in deals and prioritize upfront liquid payout over contingent tranches.
  • Avoid earnouts when the acquirer controls the outcome because they often pay less than expected.
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Walking Away From Millions For Peace

  • One founder walked away early and forfeited $60M rather than stay for tranches he didn't want.
  • He described unplugging in the Redwoods and feeling compelled to leave immediately.
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Lump Sums Can Feel Like Less Wealth

  • A large lump-sum can feel worse than steady cash flow because you switch from a money machine to a finite pot.
  • That perceived insecurity often raises the amount founders think they need to feel safe.
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