The Founder’s Final Act
Summary: As they approach retirement, company founders face a critical choice: Who will own their business next? That decision will reverberate for years, affecting not only them and their family but all the people whose lives are touched by the company. Though it can cement or undo an entrepreneur’s legacy, many owners postpone or avoid making it. And down the road that can lead to enormous tax consequences, family infighting, and instability that disrupts or destroys the business. This article describes a structured process entrepreneurs can follow to choose the owner who will come after them, drawing on the experiences of the founders of Patagonia, John Lewis, Vanguard, Rolex, and more. The first step is to think about the outcomes you want for you, your family, your employees, your business partners, and your community and prioritize them. Next comes exploring the potential options: passing the business down to family members; taking it public or selling it to investors; turning it over to your employees or customers; or donating it to charity. These choices each have strengths and weaknesses, so you need to examine how they align with your priorities. Eventually you’ll have to pull the trigger, but first you should draft a detailed plan that you can adjust as needed.
Succession planning has been called “the last act of a great CEO.” That act is infinitely more complex if the CEO is also the owner and founder of the company. When that’s the case, the decision about who will own the business next is a profound one. It will reverberate for years, affecting not only the founder and the founder’s family but also all the people whose lives are touched by the company, including employees, customers, and the community. The choice can cement—or undo—a successful entrepreneur’s legacy.
Yet many founders make the decision very late in life—or not at all. Some hold on to power until the very end, limiting their options. Or they passively turn the business over to their children, leaving them to sort out what to do with it. Many founders are so paralyzed that they simply do nothing. But when a business is passed down to the next generation without proper planning, it can lead to enormous tax consequences, not to mention family tensions, managerial conflict, and instability that could disrupt the business, forcing its sale or liquidation. The same problems also confront companies run by founder like leaders, such as second-generation owners who’ve built a business into what it is today (for example, Rupert Murdoch) or those who joined the firm early in its existence and have become synonymous with it.
Addressing entrepreneurial succession is particularly relevant these days, given the massive wave of ownership turnover currently hitting founder-led businesses—part of the “silver tsunami” of retirement. More than half of all privately held businesses with employees in the United States have owners over age 55, representing an estimated 2.9 million businesses, 32.1 million employees, $1.3 trillion in payroll, and $6.5 trillion in revenue. These figures may be even higher outside the United States, where family-owned businesses make up a larger portion of the economy. This is not just an issue faced by mom-and-pop businesses. During the past two decades some of the world’s most high-profile companies have been founder-led, including private firms like Chick-fil-A, Menards, Enterprise, and Love’s and public companies like Meta and Nike. An entire generation of founders is now facing the key question: Who will own my business after me? Despite the long-term consequences of this decision, up to 70% of family-business CEOs across the globe have no succession plan, according to the 2019 STEP Global Family Business Survey.
In this article we’ll offer a clear explanation of the possible succession choices for founders and outline the steps they should work through to make the right calls. No single solution will be appropriate for them all, so it’s crucial that founders go through the process of defining what success means to them, understanding and exploring the potential pathways for achieving it, and then, ultimately, deciding on a plan. By starting this journey early, founders can make the most of their final act.
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Originally published in Harvard Business Review Magazine, September-October 2025.