We are negotiating our exit and the buyer wants us to sign a twelve-month Transition Services Agreement to help integrate the company. We want a clean break and are worried this agreement will turn us into frustrated employees in our own business. How do we structure this transition?

Question

Tyler Smith · Accepted Answer

A Transition Services Agreement can easily become a source of profound frustration for a founder who is used to complete autonomy. Once the transaction closes, you are no longer the ultimate decision-maker. You are a contractor bound by specific deliverables, operating under managers who may have a very different conative approach to problem-solving. To prevent this relationship from souring, you must narrow the scope of your post-sale obligations during your exit runway. Do not agree to a vague, open-ended consulting arrangement. Instead, define your transition services with extreme specificity. Map your duties to clear, measurable milestones, such as transitioning key vendor accounts or training the new management team on proprietary software. Ensure the contract specifies a declining commitment of hours over a short, defined period, ideally ninety days rather than a full year. If the buyer insists on a longer transition, structure the agreement so that you are answering specific strategic questions rather than managing daily operations. Keep your role strictly defined on the revised Accountability Chart so there is no confusion about where your authority ends. By limiting your operational footprint and setting strict boundaries on your time, you protect your sanity, ensure a smooth handover for the buyer, and successfully pave the way for your next venture without violating your sanity or your contract.