When founders sell their businesses, they often expect to feel relief and satisfaction. But for 75% of them, regret sets in within the first year. Why? The emotional, financial, and personal challenges of life after an exit are often underestimated. Here are the top regrets founders face - and how to avoid them:
- Emotional Attachment: Selling a business can feel like losing part of your identity. Many founders feel "lost" or "directionless" after the sale, struggling to let go or cope with the company’s new direction.
- Financial Missteps: Poor tax planning, underestimating costs, and failing to maximize the deal can lead to unexpected financial stress. Without preparation, taxes and spending eat into the windfall.
- Lack of Purpose: Without a clear plan for life post-exit, many founders face an identity crisis. The sudden shift from a busy schedule to an empty one often leaves them feeling unfulfilled.
Key takeaway: Start preparing early. Plan emotionally, financially, and personally for the transition. Define your next steps, assemble a team of experts, and ensure you’re ready for life after the sale. Selling your company isn’t just a transaction - it’s a major life shift.
3 Post-Exit Regrets Founders Face: Statistics and Warning Signs
Why Founders Regret Their Exit (And How to Avoid It)
Regret 1: Failing to Let Go of the Company
When you sign the exit papers, it’s easy to assume you can simply move on. But for many founders, the reality is far more complicated. A company often becomes more than just a business - it becomes part of who you are. Studies reveal that when entrepreneurs see their company logos, the brain reacts in a way strikingly similar to how parents respond to images of their children [5][6]. It’s not just a metaphor - it’s a biological connection.
This deep attachment can lead to what Sachiv Tahil of Caprae Capital describes as a "psychological amputation", where the loss of the company feels like losing a piece of yourself [3]. The signs are hard to miss: obsessively questioning the deal terms, feeling personally hurt by the new direction of the company, or struggling to redefine your role [3]. You might even find yourself waking up to an empty calendar and an overwhelming sense of loss [3]. In one study of 22 entrepreneurs who sold their businesses, every single one reported experiencing profound sadness after the sale [6].
Jason Cohen, founder of Smart Bear, shared that signing his 72-page exit contract in 2007 felt like a "punch-in-the-stomach." Even though the deal was financially rewarding, the emotional toll lingered [6]. Over time, he channeled that energy into launching WP Engine in 2010, which grew into a company generating hundreds of millions in annual revenue by 2023. Cohen’s journey underscores the need to embrace change and redefine your role as life moves forward.
Let’s take a closer look at the warning signs of holding on too tightly.
Warning Signs of Emotional Attachment After Exit
Struggling to let go often shows up in subtle but telling ways. If you’re constantly second-guessing every decision the new owners make or feeling personally slighted by employee departures, it’s a sign you might still be too attached [5]. You might find yourself wondering if you left money on the table or feeling like every new strategy undermines your legacy [3]. Some founders even experience "seller’s remorse", where they feel an intense urge to buy back their company long after the deal is done [9].
The clearest warning sign? A sense of purposelessness when your involvement abruptly ends. If you can’t answer what your first step will be after your company email is deactivated, it’s a clear indication that the emotional realities of an exit may catch you off guard [3].
Recognizing these signals is the first step toward creating a plan to emotionally detach and move forward.
How Emotional Attachment Affects Your Health
The emotional fallout from selling a company isn’t just a fleeting phase. Around 72% of founders report serious mental health challenges [5]. Many also face increased risks of ADHD and mood disorders. The sudden shift from a high-pressure, fast-paced environment to quiet isolation can lead to what’s often called "post-exit depression." It’s similar to the "post-Olympic blues" that athletes experience after reaching the pinnacle of their careers [2][6]. If left unchecked, this unresolved attachment can result in chronic stress, depression, strained relationships, and even social isolation.
Ben Medlock, co-founder of SwiftKey, described feeling a "gaping hole" in his life after Microsoft acquired his company for $250 million in 2016. His story highlights that financial success alone cannot replace the sense of purpose that comes from building something meaningful [4].
Reddit Stories: How Founders Moved On
Real-life accounts from Reddit show how founders have managed to move forward by confronting their emotional struggles head-on.
Take Arvid Kahl, for example. After selling FeedbackPanda in 2019, he attempted to retire but quickly discovered that gaming and reading felt hollow compared to the fulfillment of serving customers [8]. Instead of forcing himself into permanent retirement, he pivoted to teaching. He shared his mental health journey in a 4,500-word reflection, which eventually transformed into a thriving newsletter and podcast for bootstrapped founders.
"I do a thing. I am a thing. And the distinction there is important." – Dr. Sherry Walling, Clinical Psychologist [5]
Similarly, Ben Medlock took time to reset after his SwiftKey exit. He went "off-grid" for nine months, spending time gardening and walking to clear his mind before transitioning into climate tech advising [4]. Jerome Myers, who sold his $20 million business in 2025, took a proactive approach by setting ambitious personal goals before his exit. He recommends having a clear next step - whether it’s a new project, a book, or travel - to replace burnout with a renewed sense of purpose [2]. These stories demonstrate that having a plan for what comes next can make all the difference between feeling lost and stepping into a fulfilling new chapter.
Regret 2: Bad Financial and Tax Planning Before Exit
Selling your company might feel like hitting the jackpot, but the reality post-sale can be a rude awakening. In fact, 75% of entrepreneurs regret selling their businesses within the first year [10]. That regret often stems from poor financial planning. The issue isn’t just the sale price - it’s what comes after. Many founders are blindsided by hefty tax bills, unexpected spending habits, and how quickly their financial cushion disappears.
Take Mark Daoust, the founder of Quiet Light Brokerage, as an example. After selling his first online business, he realized he could have significantly increased his profit if he had waited. By holding off for just 14 months, he boosted his business value by 450%. Yet, the new owner sold it 18 months later for double the price, revealing a missed gain of 983%. When Daoust started his next venture, he encountered another financial challenge: skyrocketing costs for design and marketing, which drained his resources faster than expected [11].
"When you sell your business, the government will most certainly send you a bill. And the bill is often much more than business owners think it will be." – Mark Daoust, Founder, Quiet Light Brokerage [11]
The tax burden alone can be staggering. For instance, selling a business for $250,000 could result in a tax bill of $37,500 at a 15% capital gains rate [11]. But many founders face even higher rates. If portions of the sale are categorized as taxable income, taxes can climb as high as 39.6% [11]. The structure of the deal - whether it’s an asset sale or a stock sale - can make a huge difference. Buyers often prefer asset sales for depreciation benefits, but for sellers, this can mean higher taxes, as proceeds are taxed at ordinary income rates instead of the lower capital gains rate [15].
Common Money Mistakes After Exit
Many financial missteps happen well before the sale is finalized. A big one? Underestimating tax liability. Founders often focus on the gross sale price and overlook how taxes will chip away at their earnings depending on the deal structure [11]. Poor allocation of the purchase price is another trap. Failing to strategically separate proceeds into capital gains and taxable income can unnecessarily inflate taxes, leaving money on the table. Worse, some founders rush into deals without understanding their business’s true value or having the right team in place, leading to failed transactions or financial losses.
Even after the sale, spending habits can derail financial stability. Founders often burn through their windfall on new ventures without a solid plan, quickly depleting what they worked so hard to earn.
How to Prepare Financially for Exit
Avoiding these pitfalls requires proactive planning. Start financial and tax planning 2 to 3 years before selling your business. This gives you time to make structural changes, like converting from a C-corp to an S-corp, to reduce your tax burden. These adjustments need to be made early to comply with IRS requirements [12].
Assemble a team of experts specializing in exit planning, including legal, tax, and business advisors [1] [12]. Your regular accountant might not have the expertise needed for complex transactions. These specialists can help you model different scenarios, focusing on your after-tax proceeds rather than the gross sale price. For example, they can assess whether a stock sale or an asset sale is more advantageous for you. Stock sales typically qualify for long-term capital gains treatment (capped at 20% plus a 3.8% net investment income tax), while asset sales often trigger higher ordinary income tax rates [12].
Strategic tax allocation is key. Aim to classify as much of your earnings as possible as capital gains rather than ordinary income. This can reduce your tax rate from around 39.6% to roughly 20% [11]. If you qualify for Qualified Small Business Stock (QSBS) under Section 1202, you might be able to exclude up to $10 million or 10 times your basis from federal capital gains tax [13]. For larger exits, "stacking" strategies can multiply the QSBS exclusion across multiple taxpayers or trusts [13].
Consider tax-deferral options like Employee Stock Ownership Plans (ESOPs), which allow you to reinvest proceeds into qualified securities and defer capital gains taxes [12]. Advanced trust strategies, such as Grantor Retained Annuity Trusts (GRATs) or Charitable Remainder Trusts, can also minimize taxes while offering immediate deductions [12]. If you live in a high-tax state like California or New York, relocating to a tax-friendly state like Florida or Texas before the sale can further reduce your tax burden [13].
Before going to market, conduct pre-exit audits. Have at least three years of financial statements reviewed or audited to build trust with buyers and avoid giving them leverage to negotiate a lower price [15]. Organize all financial documents, corporate records, and intellectual property in a secure Virtual Data Room (VDR) to streamline due diligence [15].
Finally, validate your next venture while still running your current business. Don’t gamble your exit capital on an unproven startup [11].
Reddit Stories: Learning from Financial Mistakes
These financial missteps aren’t just hypothetical - real founders share similar experiences online. Between 2017 and 2019, Arvid Kahl and Danielle Simpson bootstrapped FeedbackPanda to $55,000 in monthly recurring revenue before selling it for a seven-figure sum. Despite their success, Kahl later admitted that a lack of preparation for the post-exit phase caused unnecessary stress [16].
"76% of respondents indicated feeling profound regret one year after the exit." – Alex Jensen, Wealth Strategist, Carson Wealth [14]
The takeaway? Financial regret after an exit is avoidable. Early planning, expert advice, and a clear understanding of taxes and spending can protect your hard-earned wealth and the freedom you’ve worked so hard to achieve.
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Regret 3: Ignoring Personal Purpose and Next Steps
Selling your company might seem like the ultimate finish line, but for many founders, it marks the beginning of an unexpected identity crisis. When the deal is done, the money lands in your account, and your calendar suddenly clears, you might find yourself wondering, "What now?" 76% of business owners feel deep regret within a year of selling, often because their sense of self was so closely tied to their business [18]. When the business is gone, their purpose often vanishes too.
Here's something fascinating: brain imaging studies show that an entrepreneur's brain reacts to their company's brand in the same way a parent's brain responds to their child [6]. That’s why selling a business can feel less like a financial transaction and more like a "psychological amputation" [3]. The drive that once kept you going every day disappears, leaving a void. Without a clear plan for what’s next, even leisure can feel hollow. To move forward, you need to redefine your purpose.
Why You Need Clear Goals After Exit
The issue isn’t the exit itself - it’s the lack of direction afterward [2]. Many founders spend so much time focusing on the deal that they forget to think about what comes next. They’re so eager to escape the stress of running a business that they don’t have a plan for where they’re headed. That’s when regret creeps in.
"Make sure you exit to something, instead of exiting from something." – Jerome Myers, Founder, Exit to Excellence [2]
Take Vinay Hiremath, co-founder of Loom, as an example. After selling the company to Atlassian for $975 million in October 2023, he found himself in emotional turmoil. Despite the financial success, he faced an identity crisis so intense that it led him on a dangerous trek through the Himalayas as he searched for meaning [6].
The takeaway? Money without purpose can be a dangerous combination [7]. Before you even start negotiating your exit, ask yourself: What will you do on that first Monday morning when your calendar is completely empty? [3] Having a clear vision for your post-exit life can turn a sense of loss into an exciting new beginning.
Finding Your Interests Again
Once you’ve mapped out your goals, the next step is to reconnect with what truly inspires you. This isn’t about taking a passive break - it’s about actively exploring new possibilities.
For example, Sten Tamkivi, who sold Teleport after working at Skype, chose an "anti-sabbatical." Instead of taking time off, he enrolled in a Stanford course, which eventually led him to launch Plural, a €250 million investment fund [4]. This shift in environment and mindset helped him find his next big venture.
Maintaining structure during this transition is key. Build routines that support your well-being, like regular workouts, meditation, or daily walks [17]. You might also create a personal mission statement, much like a business mission. Ask yourself: What excites you? What kinds of conversations energize you? Who are you outside of your business? [18]
Reddit Stories: Successful Transitions After Exit
Real-life examples from founders show how they’ve navigated the post-exit void by redefining their goals. Take Arvid Kahl, who sold FeedbackPanda in 2019. At first, he tried filling his time with gaming and reading, but it left him unfulfilled. He eventually found purpose by writing about mental health challenges for founders, which blossomed into a new career as a teacher, podcaster, and author [8].
"The easier you can decouple your entrepreneurial role from your personal identity, the more you'll be able to find passion and a means to keep having an impact on people's lives." – Arvid Kahl, Founder, FeedbackPanda [8]
Another example is Stephanie Camarillo, a franchise owner from Idaho. Before selling her business in 2016, she began transitioning her identity into what she called a "freedompreneur." She focused on mentoring up-and-coming entrepreneurs and hosting retreats, ensuring her sense of purpose wasn’t tied to her business ownership [18].
The bottom line? Selling your company isn’t the end of your story - it’s just the start of a new chapter. But that chapter needs to be planned before the ink dries on the deal.
How to Avoid These Post-Exit Regrets
Avoiding post-exit regrets starts with early and thoughtful preparation. The process of planning for your exit should begin well before the deal is finalized. This approach helps you sidestep emotional struggles, financial missteps, and the risk of losing your sense of purpose.
Think of your exit as a transition, not an endpoint. It's worth noting that while 80% of business owners aim to exit within the next decade, only 30% actually have a plan in place [22]. This gap between intention and preparation is often where regret takes root.
Preparing Yourself Emotionally
Separating your identity from your business is a gradual process, and it requires intentional effort. Start working on this emotional detachment well before the sale is completed. Bringing in professional M&A advisors early can help reduce the emotional toll of negotiations [19].
Another effective strategy is to plan for unstructured time after the sale. Take Daniel Kivatinos, for example. After selling his mobile medical platform, DrChrono, in November 2025, he took a full year off. During this time, he drove across the U.S. twice, giving himself the mental space to reset. This break allowed him to realize he wasn’t done with Silicon Valley, and within a year, he launched a new AI platform called JustPaid [20].
"Some exits, they just stop us in our tracks... the wealth, the time, the freedom. It didn't bring peace at first. It made things worse." – Anastasia Koroleva, 4x Exited Founder [20]
Therapy and coaching can also play a crucial role in addressing the emotional challenges that often come with newfound wealth and freedom. For instance, Dan Berger, who sold Social Tables for $100 million, faced struggles with addiction after his exit. By engaging in a 12-step recovery program, he confronted past trauma and eventually found purpose in creating a venture focused on offsite retreat venues [20].
Here’s a quick look at some common approaches to emotional preparation:
| Approach | Benefits | Drawbacks |
|---|---|---|
| Therapy/Coaching | Helps address identity loss and explore deeper emotions. | Can take time; finding the right specialist can be challenging. |
| Unstructured Travel | Provides a complete mental reset and breaks daily routines. | May lead to feelings of aimlessness without a sense of community. |
| Post-Exit Communities | Offers a sense of belonging and advice from peers. | Risk of falling into comparison traps or obsessive wealth-building. |
Steps for Financial Planning
Financial regrets are often avoidable, but only if you take action before signing the Letter of Intent (LOI). Proper planning before entering due diligence ensures you can maximize tax benefits and protect your financial interests [21].
Build a strong deal team that includes an M&A attorney, a sell-side banker, a CPA, and a Certified Exit Planning Advisor (CEPA). This team will help you capture every available benefit [21].
Consider two contrasting examples: In one case, a healthcare software founder sold his company for $40 million in cash but lost out on a 40% equity carry and missed significant tax savings. Why? He skipped hiring an investment banker and relied on the buyer’s banker and a general attorney. In contrast, a married couple who sold their manufacturing business in 2025 took a proactive approach. They conducted a quality of earnings review, worked with industry-specific investment bankers, and incorporated charitable structures and tax deferrals. Their preparation led to a higher sale price and set them up for a future liquidity event [21].
| Feature | Proactive Planning – Success | Reactive/Short-cut Planning – Regret |
|---|---|---|
| Advisory Team | Includes specialized M&A attorney, sell-side banker, and CEPA. | Relies on generalist attorney and buyer's banker. |
| Tax Strategy | Finalized before LOI. | Deferred until due diligence. |
| Valuation | Based on detailed earnings review. | Based on initial buyer offers. |
| Outcome | Higher sale price, secure equity, and legacy protection. | Lost equity, missed tax savings, and frustration. |
Once your financial plan is secure, you can turn your attention to creating a legacy that reflects your values and aspirations.
Defining Your Legacy and Setting Future Goals
After managing your emotions and securing your finances, the next step is to focus on your legacy and future goals. Your legacy isn’t just tied to your business - it’s about what you choose to do next. Many founders find fulfillment by mentoring, teaching, or starting new ventures. The key is to identify what excites you about the future rather than dwelling on the past [5].
For example, Justin Donald, founder of Lifestyle Investor, used a year-long sabbatical to shift his focus from trading time for money to investing for freedom. He now dedicates his time to teaching financial principles to his daughter and community, which he considers his most meaningful "second act" [20].
Another option is to explore venture studios, where exited founders collaborate to build businesses that align with their passions and values rather than just financial returns [20].
| Option | Description | Benefits |
|---|---|---|
| Charitable Structures | Establishing foundations or donor-advised funds during the exit process. | Provides tax advantages and a long-term family mission. |
| Mentoring/Advising | Guiding other entrepreneurs or consulting. | Maintains industry ties and professional identity. |
| Serial Entrepreneurship | Using exit proceeds to fund a new venture. | Enables continued wealth creation and personal growth. |
Conclusion: What Founders Should Remember Before Exit
Selling your company is a major milestone, but it comes with challenges that go beyond the financials. The three common regrets - clinging too tightly to the business emotionally, overlooking financial readiness, and failing to define personal goals - can be avoided with thoughtful planning.
Here’s a striking fact: 75% of founders regret selling their business. Interestingly, it’s rarely because the deal itself was bad. Instead, the regret often stems from a lack of preparation for life after the sale. Selling your company isn’t just a transaction - it’s a life shift that requires careful planning and reflection.
"Make sure you exit to something, instead of exiting from something." – Jerome Myers, Founder of Exit to Excellence [2]
To steer clear of these regrets, start planning well in advance. Assemble a trusted advisory team, work on separating your personal identity from your business, and map out what’s next. Whether it’s mentoring, launching a new venture, or diving into long-delayed passions, having a clear post-exit vision can make all the difference.
An exit isn’t the end - it’s the beginning of a new chapter. With emotional readiness, smart financial strategies, and a defined path forward, you can be among the 25% of founders who look back on their decision with pride and fulfillment.
FAQs
How can founders emotionally prepare for selling their company?
Selling your company is more than just a financial transaction - it’s a deeply personal journey. To navigate it successfully, it’s essential to prepare emotionally, not just logistically. Start by thinking about who you are beyond your business. What aspects of running the company will you miss the most? What will give your life a sense of purpose after the sale? Exploring new hobbies, building relationships, or even stepping into advisory roles before the transition can help you adjust and avoid feelings of loss or emptiness.
It’s also helpful to map out a clear vision for your post-sale life. Set personal goals that excite you, whether it’s traveling, achieving a fitness milestone, or mentoring others. Working with a coach or therapist can provide valuable guidance as you adapt to this major change. Many entrepreneurs find it easier to move forward when they have something meaningful to look forward to, rather than simply stepping away from their business.
Lastly, don’t lose touch with the connections you’ve built. Stay in contact with former colleagues, revisit your personal goals often, and consider taking on advisory or board roles. This allows you to stay connected to the mission you cared about, without the day-to-day responsibilities. With thoughtful preparation, this transition can become the start of an exciting new chapter in your life.
What are the key financial steps to take before selling your company?
Before stepping away from your company, it’s essential to plan carefully and bring in the right experts to guide you through the process. Start by consulting with a tax attorney, CPA, and wealth strategist. These professionals can help you evaluate the deal, identify potential risks, and structure the transaction in a way that reduces your tax burden. Planning early not only gives you more control over the process but also allows you to align the sale with your personal goals - whether that’s retiring, launching a new venture, or contributing to causes you care about.
Key steps to focus on include projecting your after-tax proceeds to avoid unexpected surprises, structuring the deal to reduce taxes, and crafting a solid post-sale cash-flow plan. This should include setting aside funds for emergencies, diversifying your investments, and ensuring long-term financial stability. With these steps in place, you can turn your business exit into a foundation for the next chapter of your life, avoiding the common regrets many entrepreneurs experience after selling their companies.
How can founders rediscover purpose after selling their business?
Rediscovering your purpose after selling a business starts with reimagining who you are outside of your company. It’s common for founders to feel a sense of loss or aimlessness after an exit - the daily grind and the steady stream of achievements suddenly disappear. To move forward, dig into what truly excites you. Whether it’s mentoring, teaching, or diving into a passion project, look for opportunities that align with those interests. For example, joining advisory boards or mentoring up-and-coming entrepreneurs can be a great way to stay connected to the business world while finding personal fulfillment.
Prepare before the sale closes. Take the time to think about what you want your post-exit life to look like. Whether it’s writing, traveling, or getting involved with a nonprofit, having a plan in place can make the transition smoother and less overwhelming.
Lastly, channel your entrepreneurial spirit into something new and meaningful. This could mean launching a nonprofit, investing in startups, or tackling a personal project that resonates with you. By focusing on something that feels purposeful, you can fill the identity gap and start a fresh, rewarding chapter.
