David Cummings on Startups

Time Off After Selling a Company

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David Cummings

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One of the more popular questions I get is “how much time did you take off after selling Pardot?” My situation was unusual in that I wasn’t personally part of the deal post-sale, so I didn’t have an employment agreement or earn-out. After selling the company I promptly started looking for a building to buy for the Atlanta Tech Village and I started Kevy (a cloud integration startup). Personally, I enjoy working on new ideas, so I just went right to the next item on my list (see Keep a Google Spreadsheet of Business Ideas).

Over the past 18+ months I’ve talked with a number of other entrepreneurs and asked them a similar question about amount of time off. The most common response is that they thought they’d take 1-2 years off only to find that after nine months they got bored and started looking for the next gig. After helping run a successful company, working with a number of great people, and building something special, life post-sale can be less exciting. Sure, having financial freedom is great, and pursuing personal projects is fun, but the thrill of a fast-growing company is truly special.

Another response I’ve heard talking to successful entrepreneurs is that they took time off and got so engrossed in the life of their kids and community that they won’t ever start another company. One entrepreneur even described it to me that his entrepreneurial muscle had withered and he can’t see himself running another company — the entrepreneurial drive was no more.

Based on my informal poll, I’d recommend entrepreneurs plan for nine months off after selling their company. Of course it’s an individual decision, but this was the most common timeframe to enjoy things and refresh before finding the next thing.

What else? What are some other thoughts on time off after selling a company?

Comments

3 responses to “Time Off After Selling a Company”

  1. Dave Williams Avatar
    Dave Williams

    I think this question largely depends on your age and number of independent start ups, earn out period, non compete period, life goals, battle scars, and years in the trenches. Having done this a few times and over 16+ years primarily between three start ups- 360i, IgnitionOne(SearchIgnite), and Blinq Media (left in May 2013), I can tell you the cycle of startup from day one, growth, hiring/firing, funding, pivot, sale process, integration, working for someone else, and then the lengthy non compete should be rationale enough to keep you on the sidelines for at least 12-36 months, if not forever if you find it in your soul to do this. Anything less than this in my opinion is too fast, and not enough time to rebuild and grow unencumbered from the experience. Plus, my suggestion would be for those that can truly not work again to get out of the entrepreneurial trenches, to travel extensively, learn new things, see new places, do good for the world and those around you, disconnect from the grind, focus on yourself, family, wife and close friends, and strengthen your spirituality, physical fitness/health, and mentally reinvigorate yourself outside the confines of capitalism and without any strings attached- emails, social media, etc. Be selfish now that you can to focus 100% of this time on your growth, happiness and spiritual-self. I think what you will eventually find is that life is a much better place on the other end, a reinvigorated creative mind, a treasure trove of ideas. This change will be tough, like kicking an addiction, don’t fear the process but embrace it, and resist the urge to fall prisoner to this again as there is something much greater that is meant for you and those around you in your life that business has brought to you. Capitalism, summit into the entrepreneurship peaks, doesn’t have to be the pinnacle of life but an enabler to find greater meaning and good that you are capable of. As you learned on the way up, it is fraught with obstacles, crevices, precipices, and danger, so don’t forget this and each sumit attempt is very different and fraught with even greater dangers, team dynamics, and other unforeseen hurdles, so don’t forget this! Don’t rush this process but take the time to grow, liberate and explore what you are capable of versus falling back into the trap of your routines, obligations and obsession. You deserve this time away, your acquirer paid you for it, and so do those around you too. Not until you have experienced this should you make any decisions and until then just say no. It will be tough but one of the most rewarding experiences and self discovery process you have ever experienced. Don’t sell yourself short!

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  2. Ron Hollis Avatar
    Ron Hollis

    Interesting topic that is very individual and unique. I think Dave is right on with his input, particular that age and past entrepreneurial experiences (startups, failures, battle scars, etc.) are major contributors to your decision to “do it again”.

    I love truly entrepreneurial businesses and really expected to be back in a business within a year. My initial strategy was to acquire a previously started business with potential and take it to the next few levels. I was not interested in starting at “day 1” (still have vivid memories of my dining room with no money and begging customers for those early orders). Interestingly, I struggled to find a business that worked for my plan. I had a couple of close ones that blew up because of the entrepreneur or some of his earlier bad decisions.

    While searching for the next gig, I spent my time coaching entrepreneurs on their business and trying to increase their likelihood of success. I call this “entrepreneurial altruism” and rationalize that by helping a business through helping the CEO entrepreneur with the potential to be successful, I can have a greater impact on society than if I just joined the board of some charity. Interestingly, this has turned into an experience of sufficient frustration and greater understanding as to why so many businesses fail….the early stage CEO entrepreneur is very bad at executing a business and unwilling to change what is needed to be changed to be successful.

    Anyway, while doing my coaching was not a full time job, I filled the rest of my time with a new found hobby, Poker, and having new life experiences with my wife and son, who is 7 years old and having a great time in life. This has had an amazing impression on my view of living life and sharing experiences with others.

    To Dave’s point…over time the pressure to need to be an operating entrepreneur seems less important and your ability to focus on other areas of living become apparent. I still think I will run another entrepreneurial company but think I will be a very different CEO because of the time I have enjoyed being in the gap. I’m not rushing the process and actually allowing life to evolve, which is not how i have ever operated before.

    At the end of the day this topic is a VERY HAPPY PROBLEM for us to think about .

    Ron

    Reply
  3. DuaneD Avatar
    DuaneD

    This is a great post. I am going through this transition right now. I owned a construction company for the past 9 years. I shut it down last year and moved to a new city to start a design firm. I am enjoying the free time so much I wish I could stay like this. Unlike some I didn’t really come out of the business with much money so I have to find more income which is the only down fall.
    I have since then started a motivational blog. I am also thinking about setting up myself for speaking engagements to help others deal with the life of being an entrepreneur. I am becoming very fit also. I started cycling over 100 miles per week. I go swimming everyday with my son and my wife and I are talking more.
    What I have learned from this break is I will take care myself and my family a whole lot better than I did in the past. The money was great but I was killing myself.

    Reply

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