“The 3 Hardest Parts of Selling My Company”

Adam Banks founded New York Sports Med, a physical therapy practice, with two partners in 2007. One of his co-founders was a rehab doctor, the other a physical therapist. With twenty-thousand dollars in the bank, Adam and his partners signed a 10-year lease for an office space in New York City.

The early stages weren’t glamorous. “For a year I took out the trash,” Adam laughs.

But their hard work paid off. NY SportsMed took off, eventually growing to three locations in Manhattan. However, each expansion required about a half-million-dollar outlay. “Every new office meant that we as the owners didn’t take pay for a year or two,” says Adam. After eight years, “we got to the point where we were sick of self-funding our growth.”

The founders began to explore raising capital, and started connecting with investors on Axial. Not infrequently, conversations about raising money will open up M&A discussions — which happened in this case. In the summer of 2015, a strategic acquirer offered to buy the practice outright, and Adam and his partners sold NY SportsMed to Orthology.

The deal moved quickly, and Adam was surprised by the emotions that came up for him after the sale. He talked to us about three of the most difficult feelings he dealt with.

Loss of Control

After the deal was finalized, Adam transitioned from CEO of NY SportsMed to Head of Acquisitions of Orthology. His sudden lack of control over the company he had built from its infancy was startling. “The second you sell your company you absolutely are not in control of it anymore. The feeling of somebody else running your company and you being an employee can be more difficult than what you might imagine.”

In the first few months of his new role, Adam began to question whether his original motivations to raise capital had been misguided. He points to the “artificial pressure” among entrepreneurs today to emulate rocketship tech startups by raising more and more money. “Everything we read is about billion dollar companies. If you’re not a billion-dollar company, no one is talking to you, or about you.” In a way, Adam muses, his attempt to fulfill this narrative may have led him to forget about the freedom that comes with owning his own company. 

Shifting Loyalties

Adam attributes NY SportsMed’s success to a number of factors (for example, a highly SEO-friendly name that brought in tons of clients). But he says the most significant driver was culture. Lifestyle brands like Equinox and SoulCycle served as Adam’s inspiration as he worked to build a thoughtful, differentiated culture for the business.

“There’s nothing less aspirational than a typical doctor’s office. Our goal was to make physical therapy a cool and exciting place to go. Culture was the marrow of our business, from the people we hired to work the front desk, to the aesthetics of the office, to the philosophy of care,” say Adam.

Pre-sale, he and his partners had worked hard to create a family of employees with shared goals. While their acquirer had similar values, team dynamics inevitably shifted after the sale. “It’s only natural for your employees to form new loyalties,” says Adam. “You all work for a different boss now.”

Adam and his co-founders were rewarded financially as a result of the transaction. “But I worried about everyone else, from the person who’d been cleaning for me for eight years to the guy that painted for me once a month. It’s common in transactions for people lose their jobs, and that might mean some of your closest employees. You’re changing not only your lifestyle, but the lifestyle of everyone who works for you.”

Missing the Intensity

Before starting NY SportsMed, Adam worked as a pilot for eight years. “I got into it because my neighbor was a pilot, and he was the highest paid person I knew in my small town of 1,800 people,” says Adam.

“But flying wasn’t creative enough for me. I need multiple things going on, and with flying, you have just one thing going on all the time. There’s no creativity: you have to land the airplane where the airlines tells you to, when the airline tells you too. Toward the end of my eight years I was feel growing tired of the long days away from home.” Hence his move into entrepreneurship.

But after eight years running a cyclical, cash-flow sensitive business in the complex healthcare industry, “there was a part of me that longed for the simplicity of flying.” This longing led in part to the decision to sell NY SportsMed.

Now? “There’s very little stress,” Adam says. But he’s realized that “sometimes not having the stress is difficult too,” especially after so many years obsessing about every aspect of the business’ strategy and operations.

Still, there are upsides. Having stepped out of the entrepreneurial cockpit for now, Adam has time to reset. “I’ve been meeting new people and spending more time talking to people I should have spent time talking to when I was running the business.”

Conclusion

Selling a company is a stressful process for everyone involved, but it’s a particularly emotional one for the business owner.

There’s no roadmap for the range of feelings you’ll likely experience post-sale. But advance preparation can help soften the blow. If you’re just getting started in the exit-planning process, map out your ideal role post-sale. If you won’t be running day-to-day operations, what do you plan to do with your excess time and mental energy? (For information on crucial preparations, download The Seller’s Guide to Life After Sale.) You may find that once you’ve adjusted to your new reality, you’re ready to take on new challenges with aplomb.