What founders do with their money after they sell
Betting on yourself made them rich. It can also be hard on what comes next.
vizmaya desk, 14 October 2026
For many founders, the fortune sits in one place.
For years, most of what a founder owns is their company. That is one big bet. People call it concentrated: too much money in one place.
It is a fine way to build something. It is a risky way to keep it.
Source: Moskowitz and Vissing-Jørgensen, American Economic Review, 2002. Coin stacks are an illustration.
Winning once makes you trust yourself more.
Most founders start out very sure. In one large survey, 81 of every 100 new business owners said their own chance of success was 7 in 10 or better. A third said it was certain.
That confidence helps you start. It also follows you after the sale.
Source: Cooper, Woo and Dunkelberg, Journal of Business Venturing, 1988. About 3,000 new business owners, surveyed when they started.
More founders are holding real cash, and earlier.
A founder can now sell some shares before the company is sold. In the first half of 2026, one big US platform ran:
United States data. Source: Carta, 20 August 2026. The most for a first half in at least six years.
With money in hand, “enough” keeps moving.
Yale researchers asked 52 founders who had sold. When they started out, they said about $10 million would be enough. Today they said about $65 million.
7 in 10 wanted more money after the sale. Their average worth at the sale was about $15 million.
Only 52 people. A clue, not a rule.
Source: Swearingen and Wasserstein, Yale School of Management case, 17 February 2025. Founders worth $10M or more.
Most never planned for the day after.
Picture a fisherman who sells his boat and never needs to fish again. No early alarm, no harbour friends, no reason to get up. The Yale authors use this picture for founders.
Only 2 in 10 of the founders had thought about life after the sale before it happened.
Source: Yale School of Management case, 2025.
Spending jumps too.
The middle founder in the survey spent about $325,000 a year before the sale. After it, about $600,000 a year.
Spending is also the one number a founder fully controls. They cannot control the market or taxes.
Source: Yale School of Management case, 2025. Median yearly spending, 52 founders.
Many own risky private bets. Many wish they owned the plain stuff.
84 of 100 founders in the survey held money in private companies or special funds that bet on them.
Asked what they would add, the plain choice won: an index fund, one basket holding tiny pieces of hundreds of companies. It was picked about six times as often as risky private funds.
Source: Yale School of Management case, 2025. The 6 to 1 bars show the ratio, not a count.
The next bets are different. Now you are not driving.
In your own company you choose the product, the price and the team. When you put money into someone else's company, you hand over the wheel. You wait for news.
The same confidence now has nothing to steer.
This is our reading, not a measured result.
Most early bets lose money. A few win very big.
Say you put $100,000 into each of 10 young companies. This example is made up, but it copies a real pattern. Seven give back less than you put in. Two give back about the same. One gives back $2 million.
In real data, 7 in 10 such bets returned less than was put in. 1 in 10 produced 85% of all the cash.
United States data. Source: Wiltbank, Angel Resource Institute, 2016 report.
Two bets usually miss. Ten bets usually hit.
Say each bet has a 1 in 10 chance of being the big winner. Back two companies and you miss it about 81 times in 100. Back ten and you miss it about 35 times in 100.
Same skill. Same confidence. Only the number of tickets changed.
Each dot is one founder. Our maths: 0.9 x 0.9, and 0.9 ten times. Assumes the bets are independent.
Feeling sure also makes people trade too much.
A well-known study followed 66,465 US households from 1991 to 1996. The busiest traders earned 11.4% a year. The market earned 17.9%. The authors link this to overconfidence.
They were ordinary investors, not founders.
Source: Barber and Odean, Journal of Finance, 2000. The chart is our illustration of those yearly rates over five years.
The fair objection: a few giant winners make most of the gains.
Over 90 years of US stocks, the best 4 in every 100 companies made all the money earned beyond a very safe government loan. The other 96 only matched it.
So betting big can make a fortune. But you must pick those few before anyone knows who they are.
Other research found private companies beat the stock market in some years. The evidence is mixed.
Sources: Bessembinder, Journal of Financial Economics, 2018; Kartashova, American Economic Review, 2014.
A simple fix: write your limit while you are calm.
Decide how much of any windfall can go into one bet, before the money arrives. Write it down. When the excitement comes, the line is already there.
It works for a bonus, a house sale, an inheritance or a lucky crypto gain. Only 2 in 10 founders in the survey planned ahead at all.
If you got a big windfall tomorrow, what is the first thing you would do with it?
Reply wherever you found this story. We read what you tell us.
This story is education only, not personal advice. Investments can go down as well as up. Think about your own situation, and speak to a licensed adviser before you act.
Sources and method
- Carta, Tender-Offer Activity Reaches a Four-Year High, 20 Aug 2026.
- Swearingen and Wasserstein, Exploring Six Key Decisions Post-Exit Entrepreneurs Will Have to Make, Yale SOM, 17 Feb 2025.
- Cooper, Woo and Dunkelberg, Entrepreneurs' Perceived Chances for Success, 1988.
- Moskowitz and Vissing-Jørgensen, The Returns to Entrepreneurial Investment, 2002.
- Kartashova, The Private Equity Premium Puzzle Revisited, 2014.
- Wiltbank, Tracking Angel Returns, Angel Resource Institute, 2016 report with 2017 update.
- Barber and Odean, Trading Is Hazardous to Your Wealth, 2000.
- Bessembinder, Do Stocks Outperform Treasury Bills?, 2018.
Method. The Yale survey is small (52 founders, self-selected). The angel data is American and from 2016. We found no large study that tracks what exited founders do with their money, so this story joins several nearby studies. The ten-bet example, the 81 and 35 in 100 miss rates, the five-year growth lines and the idea about control are our own working, and are labelled as such.
Pictures. Hero: Dietmar Rabich / Wikimedia Commons, CC BY-SA 4.0. Stock exchange: Thomas J. O'Halloran, Library of Congress, public domain. Garage and boat: drawn for this story.
Education only, not personal advice. Investments can go down as well as up.