Founders Exit Plan: Closing the Deal
WELCOME TO YOUR NEW LIFE
This is the moment everything becomes official. “Closing” typically refers to signing all documents and transferring funds/ownership. It might happen in a meeting with lawyers or virtually via electronic signatures nowadays. It’s usually anticlimactic in the moment – lots of paper signing – but it represents the culmination of your hard work.
Review the closing documents: Prior to closing day, you’ll get a stack of documents to review: the final purchase agreement (if not signed earlier), bills of sale, assignment of leases, intellectual property assignments, non-compete agreement, escrow agreement, etc. Review them carefully with your attorney to ensure they reflect what was agreed. Verify things like the final purchase price adjustments (for inventory or working capital, if applicable) are correctly calculated.
Sign and transfer: On closing day, you and the buyer sign everything. If it’s an asset sale, you sign documents to transfer each asset (titles for vehicles, deeds for property, etc.). If it’s a stock sale, you sign stock transfer forms. The buyer signs loan agreements if they have financing. It’s a flurry of signatures, initials, and notaries. Once all conditions are confirmed, the funds are released – often the buyer wires the payment to your account (or to an escrow first, which then disburses to you). Take a deep breath when you see that wire confirmation – it’s real!
Announce the sale: Usually right after closing (sometimes the morning of), you’ll inform employees and customers. Ideally, you and the new owner do this together, portraying it as a positive evolution for the company. For employees, emphasize that the business is on solid footing, the new owner is excited to work with them, and perhaps highlight any opportunities (maybe more resources, growth plans) that come with the change. For key customers or vendors, personal calls or meetings are a nice touch to reassure them of continuity. Craft a press release or public announcement if appropriate (some small businesses might just do a client letter instead of a press release). This communication step is important to quell rumors and retain trust, so plan it in advance and execute promptly once the ink is dry.
Handle immediate financial matters: On the financial side, confirm all payments you’re supposed to receive. You might get a lump sum, plus perhaps an escrowed amount. Ensure the escrow agent and terms are clear for any holdback. Pay off any remaining debts that you agreed to settle at closing (sometimes out of the proceeds, you’ll pay off things like outstanding loans or leases unless the buyer assumed them). Cancel company credit cards or accounts that are in your name (unless transferred). Essentially, separate yourself financially from the business. Also, secure copies of all closing documents for your records (you’ll need them for taxes and in case of any future issues).
Transition agreements: If you’ve agreed to stay on as a consultant or employee for a transition period, the clock starts now. Make sure you know the scope – e.g. maybe you’re now an “adviser” for 6 months at a set fee, or maybe you’re an employee for a year under the new owner. Embrace that role with professionalism, but also remember you sold the business, so decision-making ultimately lies with the new owner.
Celebrate this achievement: Don’t forget to pat yourself on the back. Selling a business is a big deal – it’s often the pinnacle of a founder’s career. It’s okay to feel proud and a bit relieved. Many founders plan a celebration: perhaps a dinner with family or team, or even a vacation starting the day after closing. You’ve likely been running hard for months (if not years), so take some time to savor the moment. Often, there’s a mixture of emotions – happiness at a successful outcome, sadness saying goodbye, excitement (and nervousness) for what’s next. Allow yourself to feel all of it.
Emotional aftermath: Immediately after selling, some owners feel a strange void or even a down feeling once the adrenaline fades. As one mentor quipped, “Congrats on selling… now get ready for a depression”. This isn’t true for everyone, but be aware that feelings of loss can hit you. You might wake up the day after closing and think, “Now what? I don’t own a business to run!” This is normal – after all, you’ve poured your identity and energy into the business for years. We’ll talk more about coping in the post-sale section, but just know that even on the day of your big win, it’s okay if it’s bittersweet. You can be thrilled about your future and simultaneously mourn the end of an era.
Milestone: The deal is closed – you did it! You have turned your illiquid business into a liquid payoff. The business now legally belongs to someone else. From here, the focus shifts to executing any post-sale transition duties and adjusting to life after the sale. The next phases will guide you through that transition and settling into your new reality.
