$980M Exit Yields $3M
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Sam Parr shares a cautionary tale about equity dilution through the story of an entrepreneur who made very little from a massive exit.
"I know a guy who sold his company for $980 million. He made $3 million from it. It was because he's like 'We had 4 cofounders, we raised a lot of money, I gave so much equity to employees.'
I tell people that your cap table is the one thing in your company that is irreversible for mistakes. Most mistakes you can reverse or fix, but cap table is the one thing you can't fix. When I was starting my companies, I remember wanting to raise money and thinking 'Oh what's 10% here, what's 10% there? I'll make my employee pool 18% instead of 10% - we're gonna go big, if the company succeeds everyone should succeed.'
I was really loosey goosey with equity and that's one of those things now where I look at it like when people tell me they need an NDA before sharing their idea - it shows me they don't know what they're doing. But with equity, it's actually one of the very few things that's really, really important."
Sam Parr
Host of MFM and fitness influencer
Sam Parr is a serial entrepreneur and business media pioneer.
In 2016, he founded The Hustle, a business news media company that started in his kitchen with just $12 and grew to eight figures in revenue.
Sam led the charge in making newsletters popular when few believed in their potential.
After four successful years, he sold The Hustle to HubSpot, a publicly traded company. Now operating as HubSpot Media, The Hustle reaches 3 million readers daily, employs a team of nearly 100, and has been the launchpad for dozens of its staff to found their own media companies and newsletters.
Sam remains the host of the popular business podcast, My First Million, and continues to start and sell companies. He also co-founded Hampton, a highly vetted community for entrepreneurs, founders, and CEOs, and teaches people to write better through his platform, Copy That.