Financial planning after a startup exit: handling a founder's liquidity windfall

You spent years thinking about the company. The cap table and the runway. Then the deal closes and the problem changes shape overnight. The money is now yours personally, and almost nothing about running a startup prepared you to hold it. StartupTalky covers the sell side in depth, from term sheets to earn-outs. This is the part that begins the day after the wire clears: what a founder actually does with the proceeds once they sit in a personal account. The decisions taken in the first few months tend to set the financial position for the next decade, and most of them are far quieter than the sale itself. The headline number and the amount you can spend are two different figures, and founders who plan against the first one get caught out. In Australia, selling your shares triggers a capital gains tax event. If you have held the shares for more than twelve months you may qualify for the 50% CGT discount, and the small business CGT concessions can reduce or defer the bill further where the business meets the eligibility tests. Whether any of that applies depends on how the company and your holding were structured, so the real liability is rarely obvious until an accountant models it against your circumstances. Legal and broker fees, plus any deferred consideration, also come out before you see a net figure. The practical rule is simple. Do not commit the gross proceeds to anything until the tax owed has been calculated and set aside. That money is not yours to invest; it belongs to the ATO on a known date. Before the sale, your wealth and your income both came from one company. That was a reasonable bet while you controlled the outcome. After the sale, the cash is finally diversifiable, but two habits tend to recreate the same exposure. The first is rolling straight into another startup, often your own next one, with most of the proceeds behind it. The second is reinvesting the lot into the sector you know best, because it feels like informed conviction rather than a gamble. Both leave you tied to a single company or a single industry, which is the position you were just paid to exit. Spreading proceeds across asset classes and time horizons is dull by comparison. It is also the main thing that converts a one-off liquidity event into durable wealth. There is no prize for having the money fully invested within a week of the deal closing. Parking the net proceeds in a high-interest account or short term deposits while you plan is a reasonable thing to do while you work out the rest. Cash buys you time to confirm the tax figure and to separate living costs from what you can invest, so you are not making large allocation calls in the emotional weeks right after a sale. The trade-off is real: sitting in cash for a long stretch means accepting inflation erosion and missed market returns, so treat it as a staging step measured in months rather than a permanent home. Used this way, cash is a sequencing tool rather than procrastination. The first hire after

Original source: StartupTalky