The Founder’s Identity Trap - Why Letting Go Defines Deal Success

What happens when your business becomes your identity?

In this episode of Buyers’ Frenzy, host Will Lindstrom sits down with Patrick McMillan, leader of the Transaction Advisory Practice at Amplio, to explore one of the most overlooked deal killers - the founder’s inability to let go.

Patrick shares real-world stories of founders who struggled - and even sabotaged deals - because they couldn’t separate their self-worth from their company. 

He contrasts this with owners who thrive post-sale by defining a clear “next chapter” before entering negotiations. 

From defensive behavior in diligence calls to the emotional fallout after a transaction, Patrick explains why identity is often the hidden factor that determines whether a deal succeeds or collapses.

Highlights Covered:

• Why founders struggle to separate personal identity from their business
• How defensive or hesitant behavior during diligence raises red flags for buyers
• A negative case study where the seller’s lack of clarity killed trust in the deal
• A positive example of an owner who exited with purpose and confidence
• Practical steps to avoid the identity trap, including asking others “who am I outside of work?”
• Why experimenting with new roles or passions before selling creates smoother transitions
• How hesitation and delay tied to identity can diminish valuation. 

Whether you’re planning an exit or just considering the future, this conversation shows why clarity about who you are beyond your company is as critical as clean financials.

Have insights on “Deal Killers”? If you’re a CEPA, CPWA, CFP, or fiduciary with experience navigating the hidden risks that derail deals, we’d love to hear from you. Connect with us on LinkedIn or at theculturethinktank.com/contact

Chapters

• 0:00 Welcome to Patrick McMillan

Transcript

William Lindstrom: 0:00

Today I'm pleased to welcome Patrick McMillan. Patrick leads the Transaction Advisory Practice at Amplio, where he brings extensive CFO and Transaction Advisory experience, specializing in quality of earnings, financial due diligence and helping leaders prepare for exits and acquisitions. Over his career, patrick has advised companies across industries, guiding small and mid-sized businesses through the financial and cultural hurdles that often make or break a deal. He is known for combining technical rigor with people-first mindset, ensuring both the numbers and the leadership are aligned for success. So with that, I'd like to welcome Patrick. I appreciate you joining us here today.

Patrick McMillan: 0:38

William, my pleasure. Thanks for having me.

William Lindstrom: 0:40

Yeah, really appreciate it. So one of the other topics that we keep talking about, we've shared and you've shared particularly, is the concept that is the founder of the business and this sense of I can't let go of the business or I just can't let go, this whole founder's identity trap issue that can become a deal killer With your experiences. Why do you think founders struggle to separate their personal identity from their businesses they build and how should they think about letting go? And why is it so important to separate themselves from their business, particularly as it starts to impact valuation and post-transaction success?

Patrick McMillan: 1:19

Yeah, this is such a huge deal, william. It's a very large topic. We can go in so many different ways with this. I'll share kind of two examples. One myself I cannot sell my company. Why? Because I am my company. I'm the QV guy, I'm the CFO guy that comes in and actually works on the deals. If I sell that to someone else, it's going to be 100% dependent upon them, their relationships and their skills. My company, it doesn't matter whether I make $1, $100,000 or a million dollars. I can't sell it. There's no value in it. It's absolutely attached to me.

Patrick McMillan: 1:56

Myself, a company I worked with several years ago the husband and wife were the founders. They had a huge following. They sold some nutraceuticals. They also sold some exercise programs and some meal plans. It was completely based upon their relationships, number one, and their image. And so a private equity group came in and knew that. But what they did is the private equity group was interested in them because these founders the husband and wife they didn't want to exit the business. They wanted to continue in it for several years. And that's what really interested the private equity group, because there could be a five or so year timeline where the PE group can help transition the image from just the two, the husband and wife founders to a multiplicity, to a large team of people, and that was a big deal A lot of founder-based businesses where their identity is tied.

Patrick McMillan: 2:56

Why, what was one of your questions? Why? Well, let's look at, on average, how much time do we spend working? I mean, you figure, full-time jobs, 40 hours a week, right, you figure a lot of people who are founding their businesses are working 60, 80, 100 hours a week. They're spending the majority of their time building the business. That becomes their identity. It's not Patrick the father or Patrick the neighbor or Patrick the church member, it's Patrick the QV guy, and so my or their identity is absolutely tied in what they do. They take pride in that. Hey, I built this company. I have 20 employees or 200 employees. Those are families that I feed. That's something that I started from scratch 5, 10, 20 years ago, and so for them, when it comes time to exit, then it's like they're going to change from, let's just say, 60 hours a week. They're going to change from 60 hours a week to what.

Patrick McMillan: 3:53

So the question then really needs to become what are you going to do with yourself after that business exchanges hands. Are you going to stay in, you know, for a little bit Are the buyers going to? Maybe they're going to contract in you know, for a little bit Are the buyers going to? Maybe they're going to contract you as an advisor for 20 hours a week, I mean. So that's one of the questions. And what's everyone's answer when you say, hey, what are you going to do? I'm going to travel. Well, everybody travels. The question is where, with whom? What are you going to do when you get there? What are you going to do with your time? Why? Why do you want to travel? Who are you? The majority of businesses I can't remember the number, epi has done studies on this. I think it's like 70 some percent of business owners who have gone through a transaction are absolutely unsatisfied after, and the majority of those. The reason why is because what the heck are they doing now? They have no idea.

William Lindstrom: 4:45

Yeah, I've seen that and I think that also causes at least what we're hearing as well, and you've shared how it causes deals to die if you don't have that identity. So can you touch a little bit about what type of behaviors you start to see of founders as they approach the due date, where they're going to transition, and kind of how they should start to think about addressing that ahead of time? Because, first of all, what are the behaviors that the buyers are looking for that's going to kill the deal, and then how do you start to think about addressing those earlier so that you have a plan? That's more than I'm going to travel or golf.

Patrick McMillan: 5:19

I'm going to share a positive and a negative story for both of those. How's that?

William Lindstrom: 5:24

Beautiful.

Patrick McMillan: 5:25

Let's go with the negative one first. So the negative one. So a while back I was involved in a merger, these two companies that had been around. One of them had been around for about 15 years, the other one had been around for about 40. They merged and then sold the founder of one of those companies, the 40-year-old company. The father had founded the company and so the son that owned it. Now the owner thought he was going to do X, y and Z after he had all these plans. Well, I'm going to get involved in this type of restaurant, this type of business and that and everything.

Patrick McMillan: 5:57

But what happened was, during the sale, his personality completely changed. He started getting super defensive. Sell his personality completely changed. He started getting super defensive. He started we actually, long story short, the investment banker, the other owner and myself had to stop him, that guy, from joining calls because he really started getting defensive and offensive on calls. And we said, johnny, we'll just call him Johnny, johnny, you're not allowed to be on the calls anymore because we're afraid you're going're afraid you're really going to frustrate a lot of the buyers. What it boiled down to was he had all these thoughts and plans but he started realizing that he had no idea how to do any of them. I actually stayed in touch with him post-transaction for about a year or two and every single time we talked I asked him hey, johnny, what are you up to? He's like I really have no idea what I'm doing. He was frustrated. He was one of those disgruntled people. He loved the idea of the sell, the idea. It was a lot of money for him but he had no idea and he struggled. I actually that's been a few years. I should call him see what he's up to now. You know, in light of that, that's a negative. It was difficult for him for a while. After I'm going to flip and share a positive story now A sell side. I actually just finished this one a handful of months ago. I've been working with this buyer sorry, with this seller, this owner for the last couple of years. Just finished her quality of earnings.

Patrick McMillan: 7:18

She has a great investment banker getting her to go through a process. She has exactly what she wants to do. When she started this company several years ago, she started it with a co-founder and then she, the lady that I worked with stepped aside for a couple of years to serve her church. She lived in another state. She was very involved in her community and with her church and she actually built not physically built, but she built the community in that church. It was amazing she came back to the company to work on the company a bit more, you know, to kind of help the other co-founder.

Patrick McMillan: 7:55

But her goal in selling this company is to do exactly what she did before, is to completely step away. She's looking for a strategic buyer who wants the company just for the structure, for the employees and for the book of business. She doesn't want to stay on as an advisor or anything. She doesn't need to, not with the way this business is. She can completely step away and be just fine and as she does. She's going to go serve her church. She loves it, she's known in the community and she's a huge, huge, just advisor and friend to so many people. She knows exactly what she's going to do. She's done it before. So that's a big story. You know where she knows her identity. It's not Susie, the owner of such and such companies. Oh, susie, that's my neighbor who helped with Julie's kid when they were born. You know just, I mean different things like that To you, william. It's a beautiful story and I'm so excited for her to be able to step away and do that all the time after this transaction.

William Lindstrom: 8:54

No, I mean, that's amazing to have that clarity of what you're going to do next. So as we think about the first story, where you have founders in love with the idea of selling, I think a lot of us fall into traps, especially those that have been through like formal schooling programs. You start with the exit plan and you build it all up and that's the success story and you want that story. But as you're building up, it is, it sounds great, but you know when you get there. So what are some of the things that they should or would you recommend people, like in the first story, start to think about or address, or what actions can they take to see if they are in love with the idea of it and they're going to ultimately regret it, or they're in love with the idea and they're not going to regret it. They're going to be able to move on. So what are some of those things that can be done to help people get that aha moment going? I should probably find something.

Patrick McMillan: 9:44

I think, something that is very insightful. I will tell anybody this, whether you own a business and I'm looking to sell or not, but ask your family, ask your friends, ask your neighbors. Who am I? What makes me? What do I enjoy? Get a third-party perspective. A lot of times they're going to initially say, oh well, you're Patrick the QV guy. No, don't tell me about what I do for work. Tell me about who I am outside of work. What do you see? My knowledge, my skills, what can you see? I? Actually, several years ago, william, I started doing that and something that I had no idea about myself I love teaching. I did not know that, and it took many people outside perspectives to be like Patrick, you're an incredible teacher. And so I started doing that outside of work. I found a community that I really believed in and got involved in, and I started facilitating classes.

William Lindstrom: 10:42

And it was amazing.

Patrick McMillan: 10:44

It was eye-opening about me. I learned a lot about who I was. I learned about connecting with others, and so that's what I advise people to do, is ask people that are close to you who am I, what do you see me doing? And I don't want you to use work to describe it. I want you to talk about outside of work and that way you can kind of learn about how people see you, because there again, it's about image. Right, that's seeking from outside. I will also go internal for a second.

Patrick McMillan: 11:11

Not everybody can do this. I love the outdoors I just told you about I went back in Kings Peak, tullis Peak in Utah. That, for me, is introspective. I do that so that I can go and learn about myself, and so find a way where you can push yourself run a marathon, you know, or a half marathon or a 5K or something. You do, something that gets you outside of your comfort zone. Learn about who you are, because then you can really start learning about okay, maybe I want to try this and do this. You know and learn about who I am. That's outside of my work. Then that way, when you do sell the company or transfer it to someone else, then you can really start discovering those things more.

William Lindstrom: 11:51

And it sounds like there's two pieces to it. It's not only just get the perspective from others about what they think or perceive you liking, but then also going out, like what you did with the teaching, and actually try it, because I think you got to try it too, because I think it's really easy to say, oh my Lord, I'm going to want to do this and this would be so great.

William Lindstrom: 12:08

I'm going to go run a restaurant, like your example, and then you're like I don't like restaurants, like I don't like being in a restaurant anymore, or like the back of the grill or whatever it might be.

Patrick McMillan: 12:19

It's like the people who want to buy and hold real estate but I don't like cleaning toilets. Then don't clean toilets. Either hire a manager to do it or don't do the deal, because the numbers don't pencil.

William Lindstrom: 12:35

Right, exactly, and no matter what happens, there's always going to be toilets. So you just have to accept it and realize you can't.

Patrick McMillan: 12:41

You can avoid it, or no, I'm dealing with stupid people, but sometimes I have to.

William Lindstrom: 12:51

Yeah, exactly. But I think it is important to find that identity because I think, from what you're saying, it's going to create that hesitation. And then anything that creates that hesitation where you're delaying the deal or you're not going to be as forthcoming or you're not willing to let go is only going to diminish the value.

Patrick McMillan: 13:04

Like the guy that we had to say, hey, you're not allowed on these calls anymore.

William Lindstrom: 13:09

Exactly so. No, I really appreciate that insight. I think that's identity keeps coming up as a consistent one, but I really like the idea of asking others what do you see me doing and liking to do that is not related to work, and then actually taking this step like you've demonstrated. Next let's go try teaching class, see if I like it. Yeah, all right, thank you so much for that.

Patrick McMillan: 13:29

Thanks, William.

William Lindstrom: 13:31

Well, no, I really appreciate it. Again, thank you so much for your time and would love to stay connected and to keep having these conversations with you.

Patrick McMillan: 13:37

Let's do it, please do. I'm excited to hear more about your research and how it goes. And, yeah, when you publish it, I'd love to read it.

William Lindstrom: 13:44

All right Will do. I will definitely share all of that good stuff.

Patrick McMillan: 13:47

Nice Sounds good. Thanks, man.

William Lindstrom: 13:49

Thank you.

Patrick McMillan: 13:52

All right.