Over the years, I’ve spoken with many founders who want to step back but feel unsure about how to transition smoothly. It’s more common than you might think. So, I thought it might be helpful to share some of the key insights we’ve picked up from working with people in this exact position.
For most entrepreneurs, the real excitement is in the early stages: finding product-market fit, raising capital and building a founding team.
But as the business grows and the stakes rise, the role of the founder often changes in ways that not everyone enjoys. A different skill set is often needed to manage and grow sustainably.
Here’s what we’ve learned about planning a smooth transition
Why do founders feel stuck? Many founders reach a point where the thrill of building fades, and daily operations start feeling like a grind.
Some founders find it hard to let go due to attachment, or simply not knowing what their next move looks like. This can leave an unhappy CEO in place, unintentionally slowing the company down.
But how do you step back without putting the company at risk? How do you exit in a way that feels fair, both emotionally and financially?
Let’s explore the exit strategies
Trade sale: This is where you sell the business to another company, usually a bigger player in your space. It’s often a clean break, and for some founders, it’s rewarding to see their company scale further under new ownership.
Merger: Sometimes it makes sense to join forces with a competitor or a complementary business. That can open up fresh opportunities, make the combined company stronger, and give the founder a new role, or a chance to step back partially.
MBO (management buyout): If you’ve got a strong senior team, a management buyout can be a great option. The people who’ve helped build the business take the reins, which can make for a smoother transition and keep things moving in the right direction.
Internal transition: Not every founder wants to leave completely. Some stay on in a new role – like chairman, or something more specialised like CTO, CPO or CRO. It gives them a chance to stay close to the mission without carrying the full weight of running the business.
Paid exit: And sometimes, it’s just time to go. A well-negotiated exit package gives the founder breathing room to figure out what’s next, whether that’s starting something new, investing, or taking a well-earned break.
Ensuring a smooth transition for both founder and company:
For the founder
This might include job transition coaching, interview support, CV and LinkedIn optimisation, and career guidance to help define their next steps.
For the company
Key areas to focus on include restructuring, maintaining or evolving company culture, benchmarking to decide whether the successor should be internal or external, rebalancing the cap table and preparing PR to communicate the transition to the market.
How about choosing your successor?
You will need to identify the specific skills and experiences your successor needs. Avoid hiring like-for-like, conduct market intelligence to assess the talent pool, agree on a clear timeframe with the board, prepare the right compensation plan and implement a thorough handover period.
What challenges have you encountered or observed in founder transitions?
