Selling my company was a milestone that many entrepreneurs dream of. It all started with a chip on my shoulder, arrogance that I knew better than everyone else, and a laptop, eventually growing into a successful company. In a previous article, I shared a bit about the process of selling my company. But today, I get to look back on all of that nearly two years later with the benefit of hindsight.
Most problems in my life come from mis-set expectations. This is also the case here. Those not caused by mis-set expectations come from my own laziness and shortsightedness. I now look back on selling the company as the most expensive lesson I have ever taught myself.
I am writing this post for current founders who are considering selling their company to encourage you to dig a bit deeper. I am not saying do or don’t sell, I am encouraging you to really think through what you’re doing and why you’re doing it.
My company was a bootstrap success story. From its inception as me consulting, to growing the team, to building multiple successful software products, our growth was a testament to hard work and determination. I wasn’t smarter, or better connected, or better financed, or with a better pedigree than my competitors. We never took outside funding, which meant every decision, every risk, and every triumph was solely on me and my wallet. Years of this pressure eventually led me to wanting to get away from it all. For some this would be called burnout, but for me it was a personal incompatibility with parts of the business I don’t want to delve into in this post.
When I finally signed the deal to sell, it felt like I was not only getting a financial outcome, but I was also getting freedom from parts of the business I didn’t want to be around anymore. Financially, the sale put me in a comfortable position, though far from the lavish retirement many imagine.
I got lucky and sold my company to people who have treated me, my company, my customers, and my employees well. This isn't the story of a big bad acquirer who did something wrong.
When I sold, I didn't have any earn out or retention clause. I expected to leave and work on a specific startup idea. I built the MVP in my spare time and had amazing traction within 6 months, until the market tanked in fall of 2022. Then all my initial customers got laid off or projects terminated.
Since then, I haven't had any ideas that have grabbed me and felt super powerful. Without this I feel like I have been wandering aimlessly looking for that powerful idea.
And as the dust settled, I realized that this had not been just a financial transaction – it was a pivotal life event that profoundly impacted my sense of self and purpose.
Post founder life
Selling has destroyed the identity I had built of who I was as "CEO and Founder". I hadn't gone to therapy prior to selling the company. Part of my problem with selling comes from the fact I had not identified my values (https://www.therapistaid.com/therapy-worksheet/values-clarification) in advance. Once I knew them, it was obvious that 4 out of my top 10 would be negatively impacted by selling the company if I didn't start another one afterwards:
- Recognition ⬅️
- Wealth ⬅️
- Power ⬅️
- Respect ⬅️
I know that these values can be fulfilled through other ways, but for me, the agency and autonomy of being the founder also matched my personality and financial goals well. It’s hard to know this about yourself if you don’t pause the everyday cycle of building and growing to learn more about yourself. Now whenever I talk to founders I almost always push them towards getting into therapy not to fix any problem, but as a way to force a regular process of reflection and self understanding.
Another interesting learning was that I care a lot more about cash flows than wealth. What you don't know is that when you have a pile of money, you turn into a dragon. The goal becomes to sit on the pile of money and make sure it doesn't get smaller, and ideally grows on its own. This is surprisingly hard, and amongst other wealthy people and former founders I now know, this is one of the most frequent preoccupations. In fact, one of the categories people are interested in are cash flowing software businesses just like the one I had sold.
The best way to think about this is with a trite sports analogy of playing on offense vs defense. When I was the founder of a company I was always on offense working to grow and expand and find new success. Now I am working to defend what I have earned, while struggling with my inability to start something new.
While I was lucky with an acquirer who didn’t do any of the bad stuff you often read about, I also saw many mistakes I had made in the process of selling the company.
- Not getting a mentor / coach to help me understand how to be a better CEO.
- Not talking through motivations with a therapist and seeing if my goals could be better met with other approaches.
- Not thinking about selling part of the company that I was unhappy with.
- Not thinking about promoting someone else to be a leader and stepping away myself.
- Not running as aggressive of a sales process as I should have and focusing only on a few ideal acquirers. This likely turned out better for everyone other than me, but I still think about it at times.
- Not hiring the right team to support me in the sale process. Seriously if you’re going to sell, make sure you have a team that is vouched for by at least 2 founders that have sold. I did a terrible job of hiring people to represent me and this hurt me significantly from a financial, tax, and legal perspective.
- Maybe all of these could have been avoided if I had a co-founder to help me in the first place.
I want to circle back to what I wrote in the beginning. The point here isn’t that selling a company is a bad idea and that you shouldn’t do it. The point is that it’s important for you to take the time to understand why you’re doing what you’re doing, how it will impact your life, and make an informed decision.
What’s next for me
I continue to work on new ideas, and even the process of ideation itself. I build random projects like the har-cleaner library / Securely to feel like I am moving the ball forward. After all, action creates momentum.I angel invest and consult with current and aspiring founders. Often talking about topics exactly like the ones above (feel free to reach out if that’s you).
Mostly I continue to look for new ideas and co-founders to build with. If you're in NYC and interested in working with me feel free to reach out via https://twitter.com/BorisBerenberg or https://www.linkedin.com/in/borisberenberg/