Selling Your Startup

20Transitioning to a New Phase

The deal is finally closed. Now it's time for a whole new phase for your life and business.

Unless you sold your company for all cash up front, you will likely go through an extended stint working on your business as an employee of your new owner. This is typically a legal part of the purchase and sales agreement under earnout or revesting clauses.

As mentioned before, hopefully, you've negotiated some much-needed time to vacation. You'll definitely need time to decompress and destress after all of the intensity and anxiety during the sprint toward your exit.

Use it to spend some time recovering, reenergizing, and clearing your head. Recoup as much of the time you lost as you can with your family, friends, and others you care about after all of the crazy hours you've invested over the past few weeks or even years. Chances are you'll be back at it harder than ever soon enough. Don't let this opportunity slip away. Invest time at home and travel if you can. Enjoy a few great experiences afforded by all of your hard work and payout.

Vesting and Revesting

Earnouts and revesting clauses can take different trends over time as markets change, depending on your industry, stage, and acquirer intent.

They all have the same main theme, which is delaying a substantial portion of the purchase price and proceeds to the buyer. For sellers, this de-risks the transaction, maximizes their cash flow and returns, and enables them to act much earlier to take advantage ...