This is part two of 🚪 The Exit Files, my three-part Millennial Masters series following ten founders through the years around a business sale.
In part one, When growth takes over, I explored the pressure of building towards a payout nobody could guarantee.
This time, I’m looking at the months or years of work that can follow a sale, and how the deal shapes the handover. 👇🏻
An hour after the money landed
The money arrived in Luke Tobin’s account on a Monday afternoon. About an hour later, he had a big presentation with the team. They didn’t know he’d sold Digital Ethos, and he couldn’t tell them yet.
The sale had taken about fourteen or fifteen months. Luke had spent so long thinking about the figure that seeing it land in his account felt strange and anticlimactic. He still had a meeting to get through.
You can complete a sale and spend the next two years working in the business. The deal determines how much money you still have to earn and when you can leave.
The Millennial Masters I spoke to agreed to very different terms. Their experiences show why it’s worth looking closely at the job you’ll have after the sale, including who gets to make decisions about the business you built.
Another two years on the job
Thibault Louis-Lucas, known as Tibo, and his co-founder sold Tweet Hunter and Taplio in a deal that could reach $10 million. He had expected to start building something new almost immediately, but buyers wanted him to commit another two years.
“Something that we didn’t anticipate is that all the buyers out there were asking us to stay two years in business with the acquisition.”
Staying meant spending two more years growing businesses he no longer owned, with much of his payment depending on how well he did.
The buyer paid $2 million upfront, with up to $8 million more tied to revenue milestones over the following two years. A headline price can include money you’ll only receive if the business keeps growing.
Tibo knew the buyer’s founder from school. The team was relatively small, and he felt they understood how he liked to work. In our conversation, he credited the freedom to keep building independently with helping the arrangement run smoothly.
They hit five of the six revenue milestones, so the total sale amount came to $8 million. The teams stayed quite separate, though, and Tibo thought closer collaboration could have helped them grow further. The independence he’d wanted also limited how much they worked together.
You’ll be working with the buyer while pursuing those targets. How much control you keep over the work deserves as much attention as how long you agree to stay.
Back at work on Monday
Nick Telson and his co-founder Andrew sold DesignMyNight to The Access Group for over £25 million. They closed the deal on a Friday and returned to work on Monday. Nick felt proud of the sale, but they had another two years and revenue targets to hit before they could leave.
The earn-out gave them time to get used to handing over the business. With about six months left, they’d put management in place and handed much of the work to the buyer. They could start thinking about what came next.
“And then suddenly this new acquirer is telling you how to run your own business,” Nick said. By the later stages, he and Andrew were ready to leave. The two years had helped them get used to letting go.
You may feel inseparable from the business when you sign. Eighteen months of working for its new owner can change that.
Staying for the money
Nick Holzherr sold his recipe app Whisk to Samsung in what he later described as a multimillion-pound deal. Part of his payment was held in escrow for three years. Leaving before then meant forfeiting that money. His payment depended on staying, rather than the revenue targets in Tibo’s deal.
Samsung asked Nick to grow Whisk’s team from about 30 to 120 people in nine months. The app became Samsung Food, and he coordinated its integration across the company’s devices and global teams. “I worked more in those six months or nine months than I probably have ever in my life, which I did not expect.”
At the end of the three years, Nick received the remaining money. He was free to leave, but liked the team and the mission. He worked with a coach and kept diaries to understand what he wanted from work. His role had become more about securing budgets and aligning people across Samsung, and he increasingly missed building things himself.
Digital Ethos sold for a reported £8 million. Luke Tobin had no earn-out, taking most of his payment in cash and the rest in shares in the wider group. For the first few months, he worried that if he stopped holding on so tightly, “the wheels on the bus might come off”. He felt he had to justify the sale, a pressure he now thinks was probably misplaced.
He stayed in a co-CEO role and sat on the larger group’s board. His work shifted from the agency’s day-to-day problems towards strategy and acquisitions. He enjoyed working with the other CEO and seeing how a business with around 1,300 people operated.
Leaving when the business is ready
Before accepting an offer, think through an ordinary working week after completion. You’ll need to know who you report to and how much freedom you’ll have to run the business while earning the rest of the payment.
Gavin Bell agreed to a nine-month earn-out when he sold his paid advertising agency Yatter to Velstar in what he describes as a seven-figure deal. At month eight, he told the buyers he no longer felt he was contributing much.
“It doesn’t need me.” He left a month early. The handover had worked: the business could carry on without him.
You spend years making decisions that keep the business going. A successful handover means other people can make those decisions without you.
Gavin was ready to leave when he saw that happen. Working out what he wanted to do afterwards would take longer.
Next Friday on 🚪 The Exit Files
The handover ends, and the founders begin to find out what life looks like without the businesses they built. Part three gets into the routines they struggle to leave behind and why some choose to build again.
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"How much control you keep over the work deserves as much attention as how long you agree to stay." That is the line I would put on every term sheet. Tibo hitting five of six milestones while wishing the teams had worked closer shows the targets are the easy part to write down.
It’s a powerful reminder that while the wire transfer marks the financial transaction, the true exit happens slowly in the months after, as you learn to hand over the reins long before your contract actually ends.