Navigating the World of Liquidity Events: A Deep Dive Into Retired Founder’s Three Liquidity Events And Post-Exit Journey

In the ever-evolving narrative of successful entrepreneurship, few stories are as impactful as that of “Retired Founder.” If the name sounds cloak-and-dagger, that’s because it’s a deliberate move to protect his and his family’s privacy while sharing profound insights. Post-exit entrepreneur and host of The Deep Wealth Podcast Jeffrey Feldberg does a deep dive with Retired Founder’s journey from humble beginnings to massive business transactions offers invaluable lessons. Let’s take a closer look at his narrative, packed with the highs, the lows, and everything in between, and most importantly, what you can learn from it.

Being a middle-class kid from the Midwest, Retired Founder sold his bootstrap SaaS business in a multi-year series of transactions and retired in 2018. What’s noteworthy is not just his financial success, but his unexpected post-exit life of searching for purpose and identity beyond wealth.

Staying in the Race: The Power of Persistence

Retired Founder emphasizes persistence in building a successful business. “If you’re lucky, it’s going to take you twice as long and cost double what you projected to get halfway to your worst case scenario. When that happens, don’t feel like you’re special because it happens to everyone.”

Here’s the kicker: The company’s first year’s revenue didn’t even cross $10,000! But he didn’t quit. Success stories like this often reveal a common thread — they kept at it when most would have bailed out.

The Right Time, The Right Partner: Importance of Picking the Best Investor

One of the key talking points in Retired Founder’s story is timing and picking the right investor. When he got an offer to buy his company back in 2017 from the biggest competitor, he didn’t leap right away. He assessed multiple options — finding a financial sponsor, shopping the company around, or running the sale process himself.

“I thought I knew what it would be… But the investment bank we chose was a small boutique firm… They were playing a game that was so many levels deep that I didn’t know existed,” says Retired Founder.

And, indeed, selecting the most fitting partner is not just about the financial offer but also the alignment of goals and values.

Understanding the differences between venture capital and private equity is critical for any entrepreneur looking to sell their business.

“Venture capital is like putting a hundred astronauts in a hundred rockets… one of you is going to hit the moon… Private equity is a measured approach to an existing proven business that has room to grow and improve.”

Retired Founder explained that private equity was the right fit for his business because it offered a more stable and strategic growth plan.

“I would strongly recommend having your economic incentives in lockstep where it is impossible for one side to succeed without the other.”

This can’t be emphasized enough. When you are choosing an investor, make sure you are on the same page regarding economic outcomes. If you would hate to be ousted and robbed of your earn-out because of disagreements or misalignments post-deal, understand that continuity and shared financial success are key.

Intelligent Bootstrapping vs. Venture Capital

Many entrepreneurs dream of having loads of venture capital right from the onset. Counter to that, Retired Founder’s approach embodies a different philosophy: “If for some reason we would have had millions of dollars of venture capital… we would have failed.”

Bootstrapping might limit you in terms of resources, but it forces you to cultivate resilience and avoid getting too far ahead of yourself.

Starting a business from the ground up with limited resources isn’t easy. Retired Founder described the bootstrapping journey as one filled with perseverance and constant questioning. He emphasized the importance of staying in the race, no matter how difficult the early years might be.

“You can’t know and be confident about how things are going to play out. But you can be confident in your ability to deal with however things turn out.”

For Retired Founder, it was a 15-year overnight success, where they went from making under $10,000 in their first year to becoming a multi-million dollar company.

One of the pivotal moments in Retired Founder’s journey came in 2017 when he received an unsolicited offer from a competitor. Instead of jumping at the offer, he decided to run a competitive process with the help of an investment banker.

“If you’ve got a desirable asset, don’t be in a rush, don’t sign exclusivity… you’re crazy to not hire someone to help you sell your business.”

Choosing the right investor is crucial. Retired Founder selected a private equity firm that shared his vision and had a solid track record. This decision paid off enormously, leading to multiple liquidity events.

Life After Liquidity: The Real Struggle

Most success stories usually gloss over the post-exit blues. But Retired Founder shares, “The thing I would tell myself in July of 2022 is you are not alone… to be attached to something bigger than yourself.”

Once you sell your business and enter retirement, don’t underestimate the feeling of losing a part of your identity. It’s crucial to prepare both financially and emotionally for life beyond your entrepreneurial years.

Exiting a business can take a significant emotional toll, something Retired Founder experienced firsthand. After retiring, he missed the structure, purpose, and identity tied to his role as a founder.

“Be prepared that you’re going to miss the things that you’re really, you don’t think you’re going to miss.“

To address this emotional void, he started Beyond the Finish Line, a community aimed at helping other post-exit, post-economic founders find new purpose.

Beyond The Finish Line: Building Community

In light of these experiences, Retired Founder created the Beyond the Finish Line group for post-exit founders to navigate the emotional challenges of life after selling their businesses. Check out more at btfl.org.

Key Takeaways: Lessons from Retired Founder

**Persistence**: Don’t quit too soon. The early years are usually the hardest but staying in the race often leads to long-term success.

Right Partners: Utilize investment bankers and take the time to choose the right investor who shares your goals and values.

Economic Alignment: Ensure you and your investor have the same economic incentives and avoid scenarios where they succeed at your expense.

Smart Bootstrapping: Having loads of capital can sometimes lead to failure. Be smart with your resources and cultivate resilience.

Post-Exit Preparation: Don’t just prepare financially for life after selling your business; prepare emotionally too. Connect with communities like Beyond the Finish Line for support.

Final Words

Navigating the highs and lows of liquidity events is no small feat. But by taking cues from Retired Founder’s experience, entrepreneurs can forge a more informed and strategic path. Remember, preparation, persistence, and picking the right partners can make all the difference in transforming your business from a startup to a massive success. So, take these lessons to heart, and may your entrepreneurial journey be as rewarding as it is challenging.

Retired Founder’s journey is a testament to the importance of preparation, resilience, and selecting the right partners. For those considering a liquidity event or navigating post-exit life, his advice is invaluable.

“It’s going to be okay. Be confident in your ability to handle whatever life throws at you.”

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