Exiting a business is emotional, Accept it. Evolve to being a shareholder first.

An opportunity to evolve from being You at the centre -> Business at the centre

“Sameer when are you next travelling to our city. I want you to talk to Dad, he is just not getting it.” Not exactly a Sunday morning conversation that I had anticipated but knew it would be due someday.

As a bootstrapped founder of a company with >USD30mn in revenues and profitable all through the years you know each and every aspect of that journey. And it also ends up being your life. You breathe, walk, talk your business. Your pals, colleagues and growing semi-circles of acquaintances revolve around work or something to do with it. And thats also a social standing that you have painstakingly built and also had the benefit of basking in limelight. So much so that you cant imagine life without it. And not knowing what to do or what would you do in future. So you proverbially “kick the can down the road” and shut off any conversations around this with “other vague reasons”.

And selling here does not necessarily mean only exit but inviting external partners also in the future growth of the company. An aspect that your next generation is trying to showcase as their ambition and path towards establishing themselves in the historically family owned business. While as a owner you are not averse to this, but time and again you have probably not built a framework of decision making beyond you and your core team — which now also involves a family member. Letting go is difficult, but like all things — we go through the emotions — first in the mind — and when the event actually happens.

It could be well worth thinking of the next generation as a co-founder in your business and evolve the family ownership through a shareholders agreement between co-founders. An aspect that pretty much is well established amongst many diversified family groups. The agreement gives a total ownership and operating structure, which has to be followed to by all the shareholders and resolve the routine challenges before they turn into conflicts. Agreeing to doing this — in the best interest of continued business is actually a good starting point. And this should actually be preceding any strategic etc dilution events that one wants to plan and execute to bring all stakeholders aligned.

There is an opportunity to embrace anticipating future situations and plan for family members getting involved in business and starting to take decisions. You give some aspects, and still you can have oversight in areas that you wish to have for a period of time. But it has an air of process/transparency in this. Also perceived as facilitative. This is actually very helpful to the professional managers and employees as well who should not have to take sides, like a political situation. Second guessing and hitting roadblocks on decision making frustrates everyone. Stability and clarity also is an element which ensures — owners evolve to shareholders and have the ability to attract talent to them to build for future.

So when you next complain about someone else getting valuation, strategic interests from global players and you dont, even though you have been the pioneer in your space reflect internally to see if its actually the lack of this shareholder clarity and not the business which investors dont wish to get involved with. And worth always keeping in mind, what may be an exit for you, also has to be good point of entry for someone who can make this grow much bigger than its today. Shareholding is just changing hands.

P.S. As I finished the set of meetings over multiple weekends, I mentioned to the “Dad” whatever happens you will always be known as Founder of that business even after its passes hands. Think about all the businesses that have been acquired. the founders are still referred to as ex-this and ex-that. But more importantly it will release you from “not taking a decision” stress that you have been handling in your mind and also bring objectivity to the business. And it will be good for you. as the Business is No longer YOU and YOU are no longer the business.

Sameer Karulkar is the Founder and Partner at Coverpage Ventures Advisory LLP. If you wish to follow Sameer — https://www.linkedin.com/in/sameerkarulkar or https://twitter.com/KarulkarSameer .