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Ask HN: Founders who sold their company, what do you do?
143 points by PirxThePilot 11 months ago | hide | past | web | favorite | 88 comments

Exited with two co-founders when our runway ran out. Sold our IP and assets for a modest amount to our main competitor.

I realised that (as CTO) the main area I couldn't contribute to was 'the business' of running a successful company. So I decided to remedy that, I joined McKinsey and left last year as an Associate Partner. I'm now the VP Engineering at a fast growing tech company (250+ people) and the impact I can have with technology is an order of magnitude greater than before because of the intervening experience

That is very interesting! How'd you manage to come to the conclusion to go somewhere like McKinsey? How'd you get in? How long were you there and what sort of stuff were you learning?

I knew that the only way I'd learn is by doing it a lot in different contexts. Which led me to strategy consulting. Which led me to McKinsey, due to it being the preeminent player in that space.

I applied to a then nascent part of McKinsey (that is now very mature) called Digital McKinsey, as someone who could help clients build and transform engineering and product organisations. To be a CTO/VP Eng for hire, almost. Then I slowly moved more and more into the non-tech topics.

I was there for almost exactly four years. Learned all kinds of things, but most importantly how to communicate and structure my thinking in a way that works with people senior people from non-tech backgrounds.

Can you give some recommendations or some readings on how to communicate and structure your thinking that you found useful? Even a couple blog posts.

The pyramid principle is probably the book you want to read on this.

Great job! You mention you left McKinsey, but Quantum Black seems to be a McKinsey company. Do you mean you left consulting and moved into an operations role?

Good catch! QB is a wholly owned subsidiary (and it feels like a VERY different company) so I tend to think of them as separate entities. And yes consulting into operational role.

Ha, you worked for one of my work's competitors in the consulting space and now for one of their digital/analytics competitors. Small world.

Can you explain a little about how your experience at McKinsey has allowed you to have a greater impact? Why did you go back to VP Engineering after having consulting experience? At first though, I would think your technology experience would give you leverage on the business side rather than the other way around.

Among many other things the experience gave me:

* Empathy with the folks who's thinking was alien to me previously. I learned through doing their job. I could communicate with them and work in their context in a way that allows me much more leverage and ability to have impact with engineering.

* I learned the semantics and pragmatics of running a large organisation which gave me the lexicon and confidence to be taken seriously doing it (therefore more leverage) and taught me lots of small but important tactical lessons (e.g. how to manage difficult shareholders)

* How to communicate complex technical subjects to people who either don't/can't/won't understand them.

* A HUGE network

I went back because I missed it. I wanted to do consulting as a way of getting better at being an engineering leader, not leaving it forever. I was offered a few things at VC/PE firms, or in typical 'business' roles, but none of them really appealed. Not my passion.

Thanks for your insights.

I had never thought of the big 3 as possible route post-sale. Sale is not on the radar atm so back to my daily operational duties in my small yet thriving company :-)

I'd be very interested in this too, also at what age you did this.

Joined age 30/31

Sold last year (2 founders) to a very focused private equity fund from a weak position - We were bootstrapped and profitable but large competitors entered the space and we were slowly losing the battle.

From financial perspective it was personally a good deal. Now have a 3-year non-compete for a specific field. The new owner is doing well with a larger team, resources and synergies between their other investments.

One aspect that's not very often covered is the psychological side which was very hard for me. Soon after closing and moving forward, I absolutely felt lost, more than ever before - Kind of lost my purpose? No customers to care about, weaker connection with earlier team mates and professional friends from the industry, a lot of free time and no hecticness I used to have.

Started working on something new, validated and built the 1st version of the product, got very light traction but didn't find a profitable model for it. Had investment offers on table to get funded but declined as we were not confident about the business case.

Now investing slowly, doing the things I like more intensively (skiing & climbing) and trying to understand what would the next professional/entrepreneurial step be and what I want in life.

How hard is it to build something new while under a non-compete?

I understand you can find new areas to work in, but I imagine you'd think back to previous work and be tempted to make connections to that field, or use some of what you built previously in the new context.

Is it difficult, or is it just a completely separate problem space?

I sold my 10 year old company about a year ago and promoted my #2 to CEO to lead it post acquisition. Aside from the company related responsibilities I still have here's what I've been doing:

-Actively working to strip away the identity/persona I built up over the last decade while leading the company, in order to get back to "who I really am and/or accurately understand who I've become" outside of the context of the company and the role of CEO/Founder.

-Reading SO MUCH. And specifically the book "The Adult Years" has been essential for me in understanding the life stages we all go through and how to manage transition best.

-Going on extreme/esoteric retreats: like climbing a snowy mountain this winter in Poland in just a bathing suit. I'm trying to push myself physically in ways I've never done before.

-Bought a house for the first time and am learning to be a DIY god.

-Supporting my wife's entrepreneurial journey as much as possible (she's the founder of her own successful company).

-Being open again to mentoring/supporting others as much as possible.

-I hope to soon become a Court Appointed Advocate so I can help NYC area kids who are caught up in "the system" in some way shape or form.

-Oh and...lot of financial/estate planning work :)

> Going on extreme/esoteric retreats: like climbing a snowy mountain this winter in Poland in just a bathing suit. I'm trying to push myself physically in ways I've never done before.

I don't know how tall or remote was this mountain, but a guy I know nearly died (well, technically he was dead for a bit while they reanimated him on the rescue helicopter) running in Polish mountains last winter without a proper clothing.

Wow. Um...what was his medical condition?

It's hard to tell what really happened, as he has no recollection of the time before the accident. The rescue party, alarmed by his wife, found him laying on the trail, unconscious and in severe hypothermia. The thing is, while he was running in his relatively light running clothes (the whole run was supposed to take only 40 minutes), the weather suddently turned for the worse, with temperature drop and snow fall. Hard to tell if he lost consciousness just because of the cold or if something else was also a factor.

Solo founder (with VC), sold after 15 years (last 13 highly profitable).

Good question. Trying to invest carefully, enjoy life and undo the damage entrepreneurship did to my friendships, hobbies... No 40+ hours/week jobs any more, thank you.

How do you "Undo" the damage? Really interested in that part.

You dont have to be an entrepreneur to be super busy. Some part of the world expect you to work at at least 80 hours a week. So i guess this is good for everyone to know.

*As you grew older, you came to realise how little money actually means.

> How do you "Undo" the damage? Really interested in that part.

Lost time is lost, but you can get in touch with old friends, apologise to people you ignored because you were busy, find new hobbies, travel... At least that's what I'm trying to do. I also lost 2 close family members during that time and deeply regret not having spent more time with them, but that's just how it is.

> As you grew older, you came to realise how little money actually means.

I'd still disagree, it means a lot and makes life so much easier. It's just something you tend to take for granted when you have it and other things you don't naturally become more important.

I sold my company last year and the deal came with a standard lock-up period. The company that bought us has a really bright future and I'm excited to be part of their journey so I don't mind.

I'm currently working hard on integrating the product into their portfolio. Since they are using our former company as a stepping stone into a new market it's a lot like running a startup again, just with much more capital and people.

Sounds pretty fun! Are you still working as much as before?

First company I sold... paid off student loans, traveled around for a year.... then started a consultancy..

Second company I sold... invested in a friend's business (she's now my wife), self funded another business (that one failed to find a buyer).... went back to work...

Third company I sold... paid down mortgages, put kids into private schools, fixed up house, self funded another business ( currently a going concern, break even)...

What do I do now? Keep working... started a new businesses and handed off day to day operations to my business partner, and am now taking a new job so I can move to Europe.

What do I plan to do in the future... same thing, keep working, looking for interesting projects, probably start more business.

invested in a friend's business (she's now my wife) --> Best ROI lol

I played professional poker for 3-4 years after selling my first startup in 2007. In hindsight I should have jumped straight back into tech, but I was seriously burned out and the poker monies was good.

>The poker monies was good.

Would you mind sharing round figures? I've always wondered how much pro poker players that don't have endorsements etc. actually manage to scrape away from the game after rake, travel expenses, leaks (pit games), etc.

I made 90% of my winnings online, and treated live tournies and cash games as kind of a break from my real job. I was a heads up specialist (we used to be referred in a derogatory sense as "bum-hunters") who could enjoy basically variance-free winnings if you were table selecting well enough. So my winnings were comfortably in the 6 figures each year pre-tax, until Black Friday hit and it all came crashing down.

If (like me) you don't know anything about the (online) poker scene, "Black Friday" here is likely a reference to United States v. Scheinberg [1], a federal criminal case against the founders of some major online poker sites.

[1] https://en.wikipedia.org/wiki/United_States_v._Scheinberg

out of interest, do the people of the usa generally agree that gambling like this should still be illegal (especially when most other countries allow it?).

i'm in the uk and gambling is allowed.

People are going to be all over the map on this one. I see large downsides and minimal upsides to online gambling.

I think it should be illegal in practice because people get into massive downward spirals. Now, that does not mean we need no ban ultra low stakes poker, just the kind of games that cause people to go broke. Aka, someone that loses 200$ a month on poker is not a big deal. Someone that's losing 20,000+$ / month is likely a different story.

I have similar issues with the App Store and feel Apple / Google should limit in app purchases per month.

It's trivial for gamblers to get round such a regulation and trivial for bookies to plausibly deny it

You can say the same thing about DRM, but even 98% effective is good enough to be very useful. It's the same reason you can't buy lotto tickets with a credit card even if credit cards let you get cash advances that's an extra step that really makes a meaningful difference in people's lives.

I'm in the USA, and I definitely think it should be discouraged. I think I'd prefer to see social constructs over laws, but the laws do seem to be more effective.

I live in Ohio, and I'm still unhappy with the fact that we voted to change our state constitution a few years back to allow casinos to be built.

In practice, it's illegal because of Las Vegas lobbying against it. Particularly Sheldon Adelson, who has a ton of political influence

In Nevada, gambling has lawful for much longer than I've been alive. And, in most states, it's lawful within certain locations, so most states these days have casinos. I suspect the online gambling thing comes down to taxation rather than mores.

First time that I hear heads-up and variance free in one sentence.

We sold to one of the mega tech companies a couple of years ago. I'm still at the company as an engineering manager. I haven't decided what I want to do next and there's still some time until my golden handcuffs expire.

If you don't mind to share, how long are your "golden handcuffs"? I'm quite fearful of those....

Anecdotally what I typically see is a big chunk of change over 4-5 years and then smaller chunks every year to extend the handcuffs. YMMV

It's quite a long time ... I guess many entrepreneurs just want to move on and hate being on the "you are behold to us" part of the acquisition...

I can kind of understand both sides. Company I used to work for bought up a small company to expand their product portfolio. I don't know the details, but the acquired company was never really happy with their new life and 2-3 years later almost everybody from that acquisition had left (and taken some of their new colleagues with them) and there was no one left in the company that could really continue the work they'd been doing. Basically 3-4 years later it was as if the acquisition had never taken place

My handcuffs are for three years.

I'll do a throwaway for this. Company had an exit that was about $120m personally for me about 3 years ago. It was a hard slog of about 14 years during which time me and my cofounders got sick of each other, most relationships that I came in with blew up and so on.

It is so very strange to not work. First off, everyone all the time is lightly nagging you to work. I don't want to work! I already did that. Surprisingly it is my retired parents who nag the least since they understand retirement the best. It's everyone else my own age (35) that is weird. People who lightly know you ask 100 questions and you sort of have to lie or carefully select truths when you first meet someone because it goes badly saying what you really think most days. Some variation on "Don't you get bored?" constantly coming up. Answer is - no!

After a few years of this lifestyle I am settled in quite nicely and almost don't remember working except as a distant other life. I work out, I see friends, I go drinking, I get up at 7am, I read Hacker News, I do a hobby here and there. Any time I throw myself into a hobby I typically find it fills 2-3 hours a day that is just about enough time in a day to be busy for me nowadays.

One thing that definitely differentiates is I can travel and do the hobbies of a rich person. I rarely get to throw around numbers with strangers so almost weird to even type but I am spending $2.4m this year just on my little pet projects. Not businesses - just stuff I wanna do for fun with no real purpose.

I am very serious about managing my money and I'm a wealth manager's worst nightmare. I meet with everyone, talk endlessly about what is possible, read a lot on investment, and very very rarely give people my business. They are welcome to pitch but after meeting with a ton of folks I ended up making it my part time job and I always know more than the back slapping sales guys they send to try and get 1% fees out of me.

You end up finding other people in similar situations. I have a good friend from my startup days in a similar boat with a slightly lower number who made $8m on crypto this year purely out of boredom. He made $10m the year before on a startup he cofounded for 18 months again out of boredom. We get together every week or two, talk about the struggle to keep busy but not too busy. Ha it sounds like we are complaining! It's just a balance as we navigate having fun with projects but not getting stuck in a decade long slog again.

I guess I like the idea of being 'rich uncle' or 'grandpa' to a startup, having a flexible amount of involvement. Perhaps daily for 6 months, 4 days a week for a year more, and then 1 day a week from there. In the real world I just worry I'd be so involved it would accidentally be me killing myself and stressing out for 7 years to build a $20m company when my investments make me $7 a year living my life with freedom.

Dating is a bit funny when you don't work; you sort of self-select the people for whom it is an issue. People see my house at some point in the dating cycle and there's no hiding the situation. I have on a whim with 24 hours notice taken a girl I was attracted to across the world, had a great week, and then basically that was it. But by and large dating is just normal go around have dinner get a drink stuff, no helicopter sunset champagne yacht adventures. I feel a little bad I'm doing it wrong. Very few gold diggers in my life, surprisingly. I kind of was hoping at one point my friends would have to tear me off of some model. Ah well. I watch TV shows like Ballers and their idea of what rich people are like is really funny to me; I do normal things and date normal people. I suspect based on dating history I'm going to become a stay at home dad to a career minded woman. I suspect it is rewarding to raise the kids?

That lifestyle sounds amazing coming from a late 20 year old. Hoping I can achieve that in the next 5 years too :)

What was the company specializing in that you co-founded?

Good luck! It was a stunningly unremarkable software company that never makes it on Hacker News. Slogged it out, bunch of false starts, ended up going pretty well after a rough first year where it almost blew up and a really rough fifth year where it again almost blew up.

Want to get involved in a nonprofit to give back?

I've been working on a network of student-led coding clubs. We just finished our 4th semester and are already in 1% of US high schools. With the right support, I think we could make it to 20% by 2020.

zach@zachlatta.com is my email if at all interested.

Yes it is rewarding, especially if you can devote the time to give them 1:1 attention. It pays off in spades for everyone.

Curious, can you share what your hobbies/projects for this year are?

Trying to be vague but I have two hobbies that were sort of life goals and I just threw money at them until I got where I wanted. Sort of my long term gift to myself for finishing the business. I think both could've been done for a lot less but I hit a point where I said this is important to me and I owe myself a nice present.

Still working on it post-sale, but with more resources at my disposal and a sturdy safety net to prevent abject failure due to lack of resources.

I sold part of my online letting agency for a small amount of €€€ and now running another company while being a DN in Asia :)

Mind me asking, what does DN mean?

I'm guessing Digital Nomad.

Bought it back :)

Sounds like an interesting story :-)

Have you written about it anywhere, or want to share it here, maybe?

That's awesome! I'm sure most of us would be interested in this story.

Why, how and how did it work out? Would read an entire blog post about it.

I liked it! Mind sharing little details? Seems highly interesting.

I started more companies and work even harder now. What is the point of doing anything other than what you love?

The startup nearly killed me but I cashed out ~$3M after taxes. It’s all invested in a portfolio of index funds.

I moved to a ski town in Colorado and ski 3x per week and volunteer teach fitness classes 4x per week.

My wife and I have plenty of time and money so we “live sexy” - basically we’re swingers. We try to hook up with others for a threesome our foursome once a month or so. It is insanely fun but only works because we have a super strong relationship.

Hooking up with others has been great motivation to stay healthy. I live close to the main street in our town and walk to the grocery store most days for lunch. I’m in the best physical shape of my life.

I sleep on average 9 hours a night. If I ever feel at all in a negative mood I take a nap and feel great again.

I stay lightly in the entrepreneurial game but don’t do anything that demands much of my time. Working ~20 hours a week I’ll do ~$100k in profits.

My wife and I talk a lot about how we’re basically cheating at life because money isn’t supposed to buy happiness but in our case it definitely has!

Do you find being physically fit, skiing, having sex and napping fulfilling enough? I think I'm too obsessed with creating, be it writing novels, video games or new products to be happy living like you do but I also think that can hold me back - I enjoy creating too much whereas the focus should perhaps be to make money instead so you can get the life/freedom you want.

I’m still very creative but I consciously prioritize my happiness which I’ve found largely correlates with low stress, physical health, and sleep.

I’ll do a few productive benders a year where I shut myself in for a week or two at a time, but invariably I start feeling crappy and need to get back on a healthy schedule.

I think in the long run my life would be better if I struck a better balance between your approach and my own and it's something I've been thinking of doing, in particular with getting healthier.

If you’re looking to strike a balance, this image might be helpful to you.


I think OP’s Hedonism is a perfectly reasonable way to stay happy.

Contrary to religious beliefs, having regular, consistent, and healthy sex is good for the mind and body.

Even your Kama Sutra is a guide to a virtuous and gracious living that discusses the nature of love, family life, and other aspects pertaining to pleasure-oriented faculties of human life.

Stoicism and Hedonism would have been my personal approach to life.

Regular and consistent sex is very healthy, important, and normal. Don’t forget about it while you go along your creative journey.

Interesting, hadn't heard of Mohism before. I'm not looking for more hedonism and I'm fine with the amount of sex I have. I'm talking more about overlooking my health by spending too much time working specifically. It's a startup issue time management issue I think, I (and others like me I guess) keep thinking once things are more stable I'll have more time... but don't want to end up waiting until it's too late.

What industry was the startup? How many years did you work on it? How old when you started? Did you have any previous startups?

Thanks for re-upping my motivation this morning :) Congrats on enjoying life!

Always interesting to see what other people think is 'cool'.

I love my wife too much to swing. Couldn't and don't want to imagine someone else having sex with my wife.

We mostly do FFM threesomes and soft swap (oral only) in larger group situations. She’s just not that interested in other guys, moreso the ladies, which works for me.

I like to see her happy. She likes to see me happy. The dynamic obviously isn’t for everyone but it works for us.

Would it work the other way around also? Would it be okay for you to do FMM?

Independend of my wifes choice of doing ffm, i will not do this until i'm compftable with fmm and i'm not. I don't even care for ffm or fmm very much anyway but fmm is the deal breaker for ffm.

That's because you (and me too) equate sex with intimacy (in the emotional sense). This is not true for all people and I don't judge.

You're right, but most people can't do the distinction properly on emotional level, and unless they actually go through it, have no clue how they react. Once you're sure it works OK 100% of the cases, on both ends, then its probably healthy for relationship.

Anecdote - one of my ex was talked into a threesome with another girl by her ex, thinking how refreshing it would be (and she is not a typical nice girl with a good heart to start with). She couldn't handle it at all, and it contributed to their breakup quite effectively.

Nothing for me, I prefer quality rather than quantity (maybe not the best comparison, but I lack better in this case).

The ~20 hours per week part feels really interesting - having a nice income while working part-time in a small town feels great, could you share the secret? :)

The secret is that having money is the fastest way to make more money and it’s a much greater multiplier than effort / intelligence / even luck.

Yeah it helps. I got a $500k line of credit with something like a 2% interest rate last year. Makes it easy to pounce on opportunities.

Sure, but I'd still love to know what kind of opportunities you can pounce on with $500k generating such a nice income.

Part of it is managing high end vacation rentals. I don’t want to mention the rest because it could out me too much.

Assuming startup you mean a tech businesses, how have you found moving to a town? Do you think having a wife is the primary reason you don't get bored to death doing that?

I grew up in a glorified shed on a small fishing island hours off the coast of Australia so the simple life in beautiful nature is something I miss. However I imagine it would be so boring not being able to work or socialise with similar people (tech minded.)

How's ski town life? We're looking at moving to the mountains, not sure what it's like never having lived there full-time before.

I must be getting old but napping whenever you want sounds like the best perk.

How interesting. I'm happy for you that your life has turned out the way you wanted. I do wonder what your 60-70 year old self will say about you now.

Anecdotal experience from talking to old people or those with serious illness or those who had a near death experience. I never once heard I wish I worked more, the recurring theme is more in line with I wish I spent more time with loved ones and had more fun.

The Bronnie Ware book about this is great (Top 5 Regrets of the Dying), summarised here: http://www.independent.co.uk/life-style/palliative-nurse-sha...

I haven't succeeded in that area yet. But here's what I would do: I'd get a job for about 20h/week as a developer because I like developing. I'd charge a rather low pay and make sure already in the interview that the boss knows I can leave any time if he pisses me off too much. Reason being that without a regular main task and daily interaction with the same people even the biggest loner feels lonely and useless.

Then I would spend a lot of time travelling, prepping travels, honing my hobbies, and probably I would also make investing more of a hobby. I expect it's good to see the effort and ambition of other people succeeding, even if one is only passively involved in what they are doing.

Last but not least: I hope you ask this question before you succeeded financially. In the big topics in life one should have at least a broad idea what one wants to do before huge failures or huge successes are incoming.

Congratulations on your success!. Just wondering - How old were you when you started your company,what would you do differently when starting another company and the market that you were in, was a large one or a niche?

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