From the October 2004 issue of Entrepreneur

Selling your business can be a difficult and upsetting process. But it's nothing like the emotional train wreck waiting for you on the day after the sale, when you suddenly discover that you don't know what to do with yourself. You can't go into the office; you can't visit customers or send e-mails to vendors. The life you spent years building is suddenly gone.

Gone but not forgotten. Without the usual frenetic demands on your time and attention, your life seems to come to a screeching halt. Meanwhile, your mind continues to race to find the answer to one haunting question: What's next?

Chuck Hawks, an executive coach with DreamsFulfilled in Charlotte, North Carolina, helps executives and entrepreneurs answer that very question. "Selling out can create a sense of loss, or a sense of relief," says Hawks. Either way, it's a chance to find something that fulfills you in new ways. "It may not be a business thing. It may be moving to Tahiti or working for a charity. It's a chance to [ask], What really lights me up?"

Maybe you already know what lights you up and have a plan to pursue it. If you don't have such a plan, take a cue from the entrepreneurs below who have found rewarding ways to sell their businesses but keep their sanity.

Passion Play

In the 1980s, before Petco and Petsmart became household names, there was Animal Kingdom, a large Dallas pet store modeled on the dreams (and the MBA project) of its co-founder, Carol Frank. Within three years, the store was approaching the million-dollar sales mark. At the same time, however, Frank was feeling the urge to do something else.

The energy that drives entrepreneurs into a business is often the same energy that drives them out of it. For Frank, now 45, the prospect of new challenges moved her quickly out of the retail business and into distribution-and then out of distribution and into manufacturing. In the space of 10 short years, retailer Animal Kingdom begat wholesaler Avian Kingdom Supply, which begat manufacturer Avian Adventures (both of which Frank founded on her own).

"Entrepreneurs are often people [who] need kinetic energy to feel satisfied," says Hawks. This may explain why so many entrepreneurs, like Frank, are repeat performers. "They can't sit still for 30 seconds."

There are various names given to people who channel their energy into new businesses. Whether you call them "serial entrepreneurs" or "second-stage entrepreneurs," it's clear that the thrill of creating something from nothing is what really keeps them going. For Frank, each business she sold helped fund the growth of the next. Interestingly, each time she started a new venture, it was within the same core industry.

"The pet industry is addictive," Frank says. "I don't remember thinking,'I want to sell this company, and I need something to do next.' I saw a new opportunity to stay in the industry."

Frank's self-described addiction is another name for the passion that motivates entrepreneurs. "Many entrepreneurs are just never truly satisfied," says Hawks. "They see these businesses as a vehicle-a way to support their passion for an industry."

There may be at least one more transition ahead for Frank. "The plan is to sell Avian Adventures in five years when we get to $10 million," she says (projected sales for 2004 are $2 million). "At that point, we'll sell for enough money for me to retire." Of course, her definition of retirement includes speaking engagements, writing books, and educating people about how to care for exotic birds-just another way to express her passion for the business.

The Bigger Picture

Some entrepreneurs might hesitate at the idea of working inside a public company. The restrictions of reporting to a boss and taking direction from those who are higher in the chain of command might give some entrepreneurs second thoughts.

Kevin McDonald, 35, would not be among those. Now executive vice president and general manager at the Nasdaq-listed Inforte Corp. in Chicago, McDonald was, until recently, the co-founder and CEO of Compendit Inc., a $9.6 million consulting business specializing in enterprise resource planning. In March of this year, McDonald and his team sold out to Inforte for $6 million in cash upfront-and as much as $6.3 million more paid on performance over the next two years.

McDonald could have walked away, but he didn't. With an eye on having a smaller slice of a much bigger pie, McDonald took the job as executive vice president and general manager, and the business now continues intact as a division within Inforte. His executive team and most of the 54 Compendit employees stayed, too. Although he now reports to the CEO of Inforte, McDonald jokes that he doesn't struggle with the chain of command. "As an entrepreneur, I have always worked for my team, my customers, my wife, the bank...what's one more boss?"

Being a part of a larger company was not so much an exit strategy as it was a strategic move for Compendit. "I prefer to think of it as finding a partner to help us get to the next level," says McDonald of the sale. "We knew the market demand [for our services] was there; we just needed the infrastructure. But focusing on building the infrastructure was a distraction." Rather than miss a window of opportunity, McDonald and his team decided to sell to a group that had the people, the technology and the capital already in place.

Has the sale affected his daily routine? "It is a little different," he admits. "I get to focus on things that I'm good at and where I can add value." Plus, there's that incentive to keep the business growing. So even though Inforte is taking some of the back-office load, McDonald is under the gun to continue sales growth. "The other difference is that I'm working 40 percent harder now," he laughs.

There is the occasional ambiguity of working for a public company. Former Compendit employees often find themselves asking where their authority ends and Inforte's begins. "We're learning the life of a public company," says McDonald, "but we share a pretty similar vision about where we want to take this business."

Nouveau Riche?
Not everyone can sell a company and join the high-net-worth club. But if you're among the fortunate few, you may be interested in Tiger 21, an organization providing peer-to-peer learning for high-net-worth individuals.

Started in New York City by Michael Sonnenfeldt, the group meets to discuss budgeting and family issues, such as "How do I keep what I earned?" and "Talking to my kids/spouse about money," as well as more technical financial issues like "How should I set up the sale of my company to get the best advantages in retirement?"

Sonnenfeldt says he started the group six years ago in response to his own needs for support and knowledge after he sold his real estate investment business, which at the time had assets of $1 billion spread over 200 properties. "It's hard to find the right environment to ask elementary questions when most people expect you to be an expert," he explains.

Managing new wealth is obviously a common concern among the members, so lessons on investing are a large part of the Tiger 21 curriculum. "Each of us is expert at something particular to our specific industries, but we aren't expert at investing," says Sonnenfeldt. "Now, as an investor, the world becomes more complex-exactly at the moment you've lost the infrastructure you had as a CEO."

Today, Tiger 21 has about 30 members with net worths from $15 million to $100 million each. Those members are divided among three separate groups that meet one full day per month. The result is strong peer relationships that build trust, loyalty and mutual support. Current groups are centered in New York City (though one splits its time between New York City, and Boca Raton and Fort Lauderdale, Florida), but Sonnenfeldt expects to have several satellite groups operational soon. So if the $20,000 annual membership fee fits your budget, you can find more information at www.tiger21.com.

Rebound and Rebuild

Like McDonald, Whit McIsaac, 43, also went to work for the company that bought him out. But unlike McDonald, McIsaac's results were not all good.

In November 2000, McIsaac sold Client Profiles, his Atlanta-based legal technology company, to a well-funded dotcom for more than $4.6 million. As the transaction closed, McIsaac held his breath and hoped for the best. If the merger was good, it could mean national expansion. "We really wanted to take it to the next level, and [the buyer] assured us that we'd control the sales and marketing end. It was a no-lose proposition for us," he says.

But the dotcom tide was turning, and the acquirer was changing strategy, even as it continued to burn through capital. "We moved into the palace in January 2001," says McIsaac, referring to the huge new office built with the acquiring company's venture money. "Then, at my first corporate meeting, they told me we'd have to cut 20 percent of the staff. We wanted their power and money and energy. Instead, we immediately got into cost-cutting mode."

The "fairy tale turned nightmare" lasted only eight months. McIsaac worked desperately to keep his group together and his customers happy. The larger firm's infrastructure wasn't always customer-friendly, and its need to cut costs threatened to squash the high-level reputation Client Profiles had nurtured.

"By the end of that time, they had laid off most of their staff," recalls McIsaac. The Client Profiles team fared somewhat better. "As much as they tried [to break us up], we never unraveled. Our group really stuck together."

In the end, the acquiring company simply asked McIsaac to take the company back. The nightmare was going to have a happy ending after all. "We kept all the cash, 20 percent of the equity, and all the assets and accounts we had brought in," he says. "It was a very well-managed transition. They were stand-up people. They allowed us to get back up and running without any difficulty."

Though McIsaac describes the whole incident as painful, it paid off in the end. "Looking back, we're a heck of a lot stronger based on that experience," he says. Today, Client Profiles is once again independent and profitable, with 52 employees and approximately $10 million in revenue. Without venture money or palatial offices to distract them, they've sold their products to more than a thousand law firms in 37 states.

It's clear McIsaac prefers being in charge of his own destiny. He says without hesitation, "It's been a great two years."

Pass It Along

These days, David Minor gets his entrepreneurial thrills vicariously. It wasn't always that way. In 1998, Minor sold the landscaping business he started in his garage to an industry giant. Minor, just 39 at the time, took some time off to relax and even considered permanent retirement. "From May to November of 1999, I was out playing golf, traveling...and bored out of my mind," recalls Minor with a laugh. Instead of retiring, he began looking for a new business and a new passion.

As it turned out, a new passion found him when Texas Christian University (TCU) asked him to help develop an entrepreneurial studies program. Minor jumped into academia with the same energy that helped him build his $11.5 million landscaping empire. Starting from scratch, Minor became the founding director at-and the driving force behind-the highly respected Neeley Entrepreneurship Program at TCU in Fort Worth, Texas.

Of course, moving from the boardroom to the classroom meant a cut in pay for Minor, but he says the work is more rewarding in other ways. "I love what I'm doing. I'm able to make a difference in people's lives, and ultimately, that's what life is about," he says. In fact, his work makes a difference in a lot of people's lives. The program at TCU now has more than 225 students enrolled in entrepreneurial classes.

Executive coach Hawks understands Minor's decision to join academia. In most cases, the entrepreneur's true passion is not about making money, says Hawks. "Money and fame are great things to have for about 10 minutes, but what really drives most entrepreneurs is actually feeling like they've made a difference in other people's lives."


is an investment banker and author of the e-book Finding Funding.

Change Gears, and Change the World

Want to change the world? If you're looking to really make a difference in the world, consider philanthropy. Through charitable giving, endowments and foundations, your wealth can make the world a better place while, perhaps, preserving your place in history among the great benefactors. Consider, for example, the Bill & Melinda Gates Foundation, which was created in 2000 to help cure disease and improve education. Even Bill knows that there's more to life than business.

Whether you choose to give to an existing charity or to start your own foundation, be sure to get the facts. There are several organizations out there to help you, including-get this-the IRS. Before sending a big check to any charity, check out their IRS Form 990 filing, which can tell you things like how much the organization spends on executive salaries. (Click here for a deeper explanation of the form.) A reputable charity should be able to provide that form as well as audited financials.

Get more facts on philanthropy from these worthwhile organizations:

  • The Foundation Incubator allows new philanthropists can learn the ropes in an "intimate and trusting environment," according to Foundation literature. The Foundation Incubator, based in Palo Alto, California, is a support network and a technical resource for anyone who has, or would like to start, a serious philanthropic endeavor.
  • GuideStar is the ultimate source for finding and evaluating nonprofit organizations. Their encyclopedic database of charities can help you sort the saints from the scammers. Start any serious giving campaign here.
  • The Philanthropy Roundtable, a national association of more than 600 individual and organizational donors, says it "attracts independent-minded donors who understand that philanthropy is difficult to do well." The Roundtable provides both peer support and professional advice. The organization's bimonthly magazine, Philanthropy, is also a great resource.
  • Women & Philanthropy supports and encourages women and girls to work together on specific issues within the field of philanthropy.