The 5 Types of Post-Exit Entrepreneurs

Leaving a business is something many business owners yearn to do. And why wouldn't they? The act of selling and sailing into the sunset is glamorized in the media. Life-changing outing sums are reported alongside images of champagne glasses clinking and happily shaking hands. But when the paperwork is done and the business is under new management, what's left for the post-exit entrepreneur?

Scholars of entrepreneurship at the Yale School of Management, including post-exit entrepreneur A.J. Wasserstein, have argued that the aftermath of an exit can be a confusing time for the post-exit entrepreneur, or PExE for short. Wasserstein was previously founder and CEO of ArchivesOne, the third-largest records management company in the United States, which he sold to Iron Mountain after 17 years in business. He then became president of Onesource Water before selling it to Water Logic in 2016. Today, Wasserstein researches, writes and teaches at the Yale School of Management, where in 2022 he won the Excellence in Teaching Award of the faculty.

After interviewing PExEs, Wasserstein and colleagues published What's Next: The Entrepreneur's Epilogue and the Paradox of Success, and categorized PExEs into five common post-release archetypes: the do-it again, the discoverer, the recreational, investor and philanthropist.

Many PExEs fall into several different categories. Which could you be?

The do-it againer

This PExE guy "loved what he did as an entrepreneur and was clearly good at it. The release was an affirmative event, so rather than reinventing themselves, they think they should start over. The do-it-againer wants to get back into the arena after they're gone, they "remember the thrills of building a business" and they seek to recreate those highs.

After leaving their company, this PExE is fueled by "a good dose of hunger and confidence". Wasserstein warns that while many entrepreneurs are successful on their second attempt, "it's important for them to ask themselves what they're trying to prove" and remember that "the first five years are brutal and they're older now. ". There is no right or wrong answer, "but it is imperative to consider the trade-offs". After a release, a PExE can create the life of their choice, so reversion may not be the only choice.

The discoverer

Someone who "isn't sure where they'd like to be and what they'd like to do in the long term" may be a PExE Discoverer. They may feel like they are in a state of uncertainty while considering their options. In their paper, Wasserstein and colleagues outline a series of phases that a PExE should go through upon discharge, including a vital "pause" phase, during which "it is important to take some time off after discharge ". What follows, however, is to "set clear goals and timelines".

The discoverer who doesn't set clear goals and timelines can feel like they're "stagnating and constantly wandering." Wasserstein said they are "considering a wide range of options and avenues through which they can add value and make a contribution that will bring them joy and fulfillment." The opportunities for your next step are endless, which is a very good problem to have, but at some point, to find fulfillment and meaning, it helps to overcome hardships and enter a stage of commitment.

The recreational

This type of PExE rewards consumption. They "make big-ticket purchases, like houses and cars, often soon after release." They cash the check and head to the stores. They want the possessions to prove their sale. Not only that, but they book the trips and prepare to leave, spending "significant amounts of time and money on travel and leisure activities".