Poor Cap Table Costs Millions
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Sam Parr shares a cautionary tale about a founder who got a tiny slice of their company's successful exit due to poor cap table management.
"I am friends with this guy who sold his company for $1 billion - $990 million - and he walked away with $3 million because he had 4 or 5 of them [co-founders] and they raised all this money. He walked away with $3 million on a billion dollar value sale. Ain't that crazy? I can't understand how you get motivated when you're not gonna get paid."
The story illustrates how even with a massive exit, founders can end up with a relatively small payout if they give away too much equity through co-founders and fundraising.
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.