Managing wealth after a business exit

Life after selling a business

How do entrepreneurs adjust to life after selling their business? After years of long hours and intense dedication, making a successful exit can be a triumph – but it can also bring uncertainty. Founders may find themselves with capital, time and a need to develop new skills for their next chapter.

There is no rush to make big decisions. Entrepreneurs have many options after an exit, from starting new ventures to investing proceeds in traditional assets, business angel roles or philanthropy. What matters is aligning new goals with their values and interests.

“Entrepreneurs can take the time to focus on their long-term goals and structure their wealth accordingly,” says Stéphanie Lair Crommen, Head of Wealth Solutions at Pictet Wealth Management. “That may mean establishing a completely new ecosystem to support those goals.”

Some founders are keen to dive straight back in, while others may take a more measured approach. Spending time reflecting on personal goals, consulting with family and seeking professional guidance can help ensure decisions align with new priorities.

New challenges

While exiting a business is a major milestone, transitioning from builder to investor can be psychologically complex. Entrepreneurs may face a deep identity shift, moving from operational intensity to strategic patience. In Europe alone, a 2024 report found that almost 50 per cent of business owners had spent time thinking about exiting in the past 12 months.

The good news? Founders are used to surrounding themselves with experts. A similar approach is invaluable when structuring a wealth strategy. Wealth managers and advisers can help ensure financial plans align with personal goals and risk profiles.

The key is to be open to that advice, says Greg Davies, Head of Behavioural Finance at Oxford Risk, a behavioural finance fintech that works with wealth managers and financial advisers. “Entrepreneurs tend to be wired for being in control, for taking action and for getting involved; that's how they built their businesses,” he says. “When they sell the business, they suddenly find themselves with a large pot of cash that requires very different attributes; in investment, you succeed by letting go, by diversifying and by taking a long-term view.”

Shifting to an investment mindset

This mindset shift may not be straightforward, adds Lair Crommen. “Entrepreneurs are often driven by the thrill of building something new and by overcoming the challenges thrown at their businesses,” she says. “But as they become investors, they need to focus on wealth preservation and financial returns, as well as other motivations.”

Claudia Zeisberger, Senior Affiliate Professor of Entrepreneurship and Family Enterprise at Insead, encourages entrepreneurs to match their opportunities to long-term ambitions: “What are you trying to achieve now and in the years to come? And how might your attitudes – and appetite for risk – need to change compared with when you were building your business?”

Professional advice can prove particularly valuable here, especially when it comes from advisers who understand the emotional and behavioural dimensions of wealth management. A good adviser recognises that an entrepreneur's goals may shift again if a new opportunity arises.

Some entrepreneurs find it helpful to segment their capital. “Some like the idea of carving off a chunk of the money as a ‘play pot’,” says Davies, “to be invested in things that interest them, where they get involved, and where they can act more on impulse. If the rest of the money is invested more traditionally, in well-diversified assets chosen for the long term, they may feel they can have more fun with the play pot, knowing they also have a safety net.”

This balance – between structured discipline and engaged exploration – could offer a new kind of satisfaction. The process of investing becomes not just a financial transition, but a personal evolution.

The angel approach

One possibility for the play pot could be backing the next generation of business founders. Entrepreneurs' desire for an approach to investment that goes beyond traditional portfolio construction and management is one driver behind the growth of business angel investment, says Roderick Beer, Managing Director of the UK Business Angel Association. Angels make relatively large investments in early-stage businesses that are seeking finance to grow, often providing advice and support alongside their cash; across Europe, this form of investment has been growing at a rate of 20 per cent a year or more in recent years.

“It may not require as dramatic a mindset shift as moving from being the hands-on operator to a completely passive investor,” says Beer. “But becoming a business angel still involves a significant adjustment. You have to step back and let founders make their own mistakes. The key difference is that, in a mentoring role, angels can channel their entrepreneurial experience to add real value without taking the reins.”

This approach helps satisfy the entrepreneurial itch. By investing in multiple early-stage businesses, former founders can stay intellectually and emotionally engaged without the full-time pressures of operating a company. This can also be a great way for entrepreneurs to go back to the work they enjoyed when they were building their businesses, adds Zeisberger.

“One common complaint of entrepreneurs as their business grows is they no longer have time to pursue the passions that led them to found it in the first place, because they're too busy managing it,” she says. “After an exit, as an investor in other companies, you may once again be able to focus on what really interests you.”