How Much Should Founders Disclose to Their Team About a Sale Windfall?

For many founders, the sale of a company is the culmination of years—sometimes decades—of risk, sacrifice, and relentless execution. But when the deal is finally in motion, a new and often unexpected question arises: How much should I tell my team about what I personally stand to gain?

This is not just a matter of etiquette or transparency. It’s a strategic decision that can impact morale, retention, and even the final stages of deal execution. In this article, we’ll explore how to approach this sensitive topic, what to disclose (and when), and how to align your messaging with the broader goals of the transaction.

Why This Question Matters More Than You Think

In the software and technology sectors, where equity compensation is common and teams are often lean but high-performing, the optics of a founder’s exit windfall can be powerful. Handled well, it can reinforce a culture of success and inspire loyalty. Mishandled, it can breed resentment or attrition—especially if employees feel left out of the upside.

At iMerge, we’ve advised founders through hundreds of exits, and we’ve seen firsthand how disclosure decisions can shape the post-deal landscape. The right approach depends on your cap table, your company culture, and the structure of the deal itself.

What to Consider Before Disclosing

1. Understand the Cap Table Dynamics

Before you say anything, make sure you have a clear understanding of who owns what. In many software companies, the cap table includes a mix of founders, early employees, investors, and option holders. If your team has equity or options, they’ll likely be doing their own math once the deal is announced.

In some cases, employees may already have a general sense of your ownership stake. But unless you’ve been unusually transparent, they probably don’t know the full picture—including liquidation preferences, earn-outs, or tax implications. That’s why it’s important to separate perception from reality when planning your communication strategy.

2. Timing Is Everything

Disclosing too early can create unnecessary distraction or anxiety—especially if the deal is still in flux. Disclosing too late can feel evasive or disingenuous. A good rule of thumb is to wait until the deal is signed (or at least the LOI is firm and diligence is underway) before sharing any specifics.

As we noted in Completing Due Diligence Before the LOI, the period between LOI and close is often the most sensitive. During this time, it’s best to keep communications focused on operational continuity and team stability. Save personal financial disclosures for after the deal is closed—or at least irrevocably committed.

3. Consider the Cultural Context

Some startup cultures are built on radical transparency. Others are more hierarchical or compartmentalized. If your team is used to open-book management and regular updates on company performance, a sudden veil of secrecy around the exit may feel jarring. Conversely, if you’ve historically kept financial matters close to the vest, a detailed breakdown of your personal payout may feel out of place.

There’s no one-size-fits-all answer here. But in general, it’s wise to frame your disclosure in terms of the company’s success—not your personal gain. For example:

“This outcome reflects the value we’ve all created together. I’ve been fortunate to have a meaningful stake in the company, and I’m incredibly grateful for the team that made this possible.”

What You Might Choose to Share

Here are a few disclosure strategies we’ve seen founders use effectively, depending on the situation:

• High-Level Context Only: “The deal represents a strong multiple on our last valuation, and everyone with equity will benefit.”
• Equity Pool Transparency: “The employee option pool will receive $X in aggregate, and we’ll be working with HR to ensure everyone understands their individual outcomes.”
• Personal Gratitude Without Numbers: “This has been a life-changing outcome for me personally, and I want to thank you all for being part of the journey.”
• Full Transparency (Rare): “As the majority shareholder, I’ll be receiving $X from the transaction. I’m sharing this because I believe in transparency and want to celebrate this milestone with you.”

Most founders opt for something between the first and third options. Full transparency is rare and should only be considered if it aligns with your company’s values and you’re confident it won’t create unintended consequences.

What to Avoid

While every situation is unique, there are a few common pitfalls to steer clear of:

• Overpromising: Don’t imply that everyone will be “taken care of” unless you’ve run the numbers and confirmed it.
• Defensiveness: Avoid justifying your payout or comparing it to others. Let the numbers speak for themselves, if you choose to share them at all.
• Premature Disclosure: Until the deal is signed and funded, anything can change. Avoid creating expectations that may not materialize.

Aligning Incentives Before the Exit

If you’re still in the planning stages of a sale, now is the time to think about how your team will participate in the upside. Structuring retention bonuses, option acceleration, or carve-outs for key employees can go a long way in aligning interests and smoothing the path to close.

As we discussed in Exit Business Planning Strategy, proactive planning around team incentives can increase deal certainty and reduce post-close disruption. Firms like iMerge often help founders model these scenarios to ensure the exit is not only financially successful but culturally sustainable.

Final Thoughts

Disclosing your personal gain from a company sale is a deeply personal decision—but it’s also a strategic one. The goal is not to hide or boast, but to communicate in a way that reinforces trust, celebrates shared success, and preserves team cohesion during a time of transition.

Ultimately, your team will remember how you made them feel during the exit more than the exact numbers you shared. Lead with gratitude, clarity, and respect—and you’ll set the tone for a successful next chapter, both for yourself and for those who helped build the company alongside you.

Founders navigating valuation or deal structuring decisions can benefit from iMerge’s experience in software and tech exits — reach out for guidance tailored to your situation.