“Life After an Exit: How Entrepreneurs Transition to the Next Stage” is a white paper recently produced and published by the Eugene Lang Center at Columbia Business School and sponsored by Credit Suisse. The research is based on in-depth interviews with a number of entrepreneurs who sold businesses over the last ten years. The businesses sold produced personal liquidity for their principals of between $10 million and just under $1 billion. The stated goal of the paper is to provide entrepreneurs with perspective on two kinds of challenges after a sale: those they will face as they move on to the next phase of their lives, and those they will face as they learn to manage their new wealth. The former challenge is particularly relevant to the Noble Leisure Project, which aims to assist newly self-sufficient individuals in finding opportunities for continued meaning, contribution and personal flourishing beyond work.
The insights offered in this paper are useful data contributing to our own research and should be of interest to our readers. In coming months, we plan to share the stories of many of the subjects interviewed (along with others we have sourced directly), with updates and with a greater focus on the challenges of transition and personal reinvention than on the wealth management challenges toward which this paper understandably tilts. But for now, some common threads emerging from the research which align with our own:
- While the sale of a company can mark a significant success for an entrepreneur, the reality of selling a venture often represents a loss of identity and community. Entrepreneurs may go through several stages of recognizing and coping with this loss, and this process can sometimes take years.
- Most entrepreneurs do not measure success in terms of financial rewards, but rather by the sense of freedom and potential legacy that these financial rewards confer. Entrepreneurs often struggle with how best to use their new freedom and how to define their legacy. Some engage in philanthropy and government service, while others develop personal interests, or pursue new learnings and start-up ventures. However, finding the next fulfilling activity is one of the key challenges that all entrepreneurs face after a sale.
- As successful entrepreneurs learn to successfully navigate their new identity with significant wealth, family, friends and advisors are also assessing and possibly changing their interactions with the entrepreneur. Finding sources for “unfiltered” input is critical.
- Waking up to a new state as a multimillionaire is certainly a life changer. It is an event that demands a new mastering of the management of money. However, the bigger challenge is mastering the new identity of a wealthy person. The search for happiness and the true meaning of life and its transitions is not new. However, the growing bulk of research on successful paths to finding it is.
- As humans live longer, the most basic assumption that life and its institutions such as marriage and work would be linear has to change. In other words, the longer humans live, the more often and the deeper they will need to transition themselves. Life is not a straight line that goes up; it is a series of chapters, circles, reinventions, highs and lows.
The authors observe that the personal stories of each of their subjects remind us that our potential is limited only by the scope of our imagination. We heartily concur.
More information can be found at http://www8.gsb.columbia.edu/entrepreneurship/.