Scott Galloway sold L2 for $158 million but still feels financially insecure, a mindset rooted in watching Red Envelope collapse in 2008. He pledges to give away all current-year income while continuing to build wealth through consistent, tax-efficient investing. Both he and host Sam Parr admit that despite their success, they carry chronic anxiety about money and recessions.
I started an e-commerce company. I wanted to be the Williams-Sonoma of pet supplies. I put $1 million of my own money in and I sold it for like $1.5 million. So I made some money, not a lot. I invested, or I started another e-commerce company. I started a travel site, sold that for a little bit of money. I started a company called Red Envelope, which went public on the NASDAQ in 2002. And because I was young and dumb, I kept investing. And then I got in a war with the board and I did a proxy fight and I took over the board and put more of my money in. And then 2008 came and there was a longshoreman strike and a software malfunction. Dysfunction at the warehouse where we sent 10,000 gifts to the wrong addresses over the holidays. And then a Wells Fargo analyst who was like 14 decided the credit crisis was coming and pulled our line. And my stock went from $7 this year to zero in about 11 days. And when the company had declared Chapter 11 and I lost, you know, I lost pretty much everything.
Do you remember how much money, uh, when you felt that tipping point where you did feel financially secure, not like bulletproof or nothing will ever will happen, but do you remember the inflection point where you're like, okay, This feels different than I've felt on the climb.
I still don't, I still haven't hit that point. I'm still very anxious about money. You know, I had, and I like to be very open about money, 'cause I think that not talking about money is basically a decorum that is promoted by the incumbents and the wealthy such that you don't understand how much money wealthy people have to keep poor and middle-class people under the illusion that, oh, you, you should be paying 45% taxes while I'm paying 17. And I think, I think it's important to be very, I think it's helpful to be transparent. And I talk about how much money I've lost, all my investments, how much money I've gained, my tax rates, et cetera. You know, I'm, I'm still, I'm not obsessed with money. I think about it all the time. I'm trying to get a lot more. I'm, I'm giving it away. 5 years ago, I decided I was gonna give away every dollar I made in current income 'cause I wanna start catching up to the non-philanthropic Scott for the first 45 years of his life. But I'm still trying to make a shit ton of money. I still feel financially very insecure. I still worry about a recession becoming a depression and I'm the guy who lost it again. I've lost it all a couple times. And so, I don't feel I'm at that point where I don't have financial anxiety. I do sleep with one eye open. You know, I sold my first company for $28 million. By the time I split it with my ex and my partner in taxes, I ended up with a few million dollars. Red envelope, I got a few million there, but I always seem to figure out a way to lose it. But I was able to start again because I never had debt. I've always lived below my means. But I would say the big win was probably selling L2, and I like thought, oh wow, I can buy a plane. Like that was not in my reach before. So that was kind of the big one. That was like all the moons landing.
What was the price? What'd it sell for? $200 or $300 million?
No, it sold for $158 million, but we'd only done one round of venture capital. So the, you know, the common shareholders, you know, I was the largest equity owner. So the top, Between me and the top 6 employees, we probably owned 70% of it. So that was, that, you know, that was a lot of money for me. I'd never had that kind of money before. I'd always done well, but I'd never had that kind of, that kind of capital. And then getting to invest that in the midst of a bull market, we sold in 2017. I've made more money investing actually than I've made from my small, from my businesses. You know, the ability to create an army of capital, even if it's only $50 a month or $100 a month, put it in a tax in deferred or tax-efficient vehicle, diversify it, and then let time take over. Again, see above, you don't know how fast time is gonna go. That's where I've built real wealth.
This doesn't, this doesn't make sense for Shawn because Shawn is not worried about money at all. He's got this thing that I like to call like good emotional health. He's very emotionally healthy.
Mm-hmm.
His, his parents did, did him well. And he's talked to me about this. Uh, I sold my company 2 or 3 years ago and I made a, a fair bit. Enough.
What did you make? I'm like, I'm naked here. What did you make? Yeah, let's go. Let's go, Sam. You gotta say something. He's hesitant. He's hesitant cuz he's worried people listen to you. Okay, go ahead.
Uh, at the end of the, the process, uh, I walked away with about $20 million.
That— and how old are you?
Uh, I was about 30. I was 31 or 32.
So you should be extraordinary. You should be, unless you really screw up. You should be much wealthier than I am by my age. 'Cause to get that sort of capital—
Yeah, but I still, I still feel shitty. I feel the same. Like I still, like I felt awesome for a minute and then I felt shitty where I was like, oh, like when I see these world events right now, when I saw like whatever happens every 6 months, I'm like, the world's gonna end. And I, and I do, uh, like an 80, I'm boring. Sean makes fun of me. I do 80/20 index and bonds. Uh, that, that's the only, I only own those two.
That's exactly what you should be doing right now.
I think so. And I, and then I own HubSpot stock still, and then I own Airbnb stock. That's basically, basically my portfolio. And Sean makes fun of me. He's like, how are you feeling insecure? And I'm like, dude, I'm broken. Like, I'm broken. Like, it doesn't matter how much therapy I go to. I'm just, I'm a broke when it comes to money. I have a scarcity mindset and I'm broken.
Yeah, I'm the same way.
And when you talk about how you're worth, you know, $100 million plus and you don't feel secure, Sean said he's like, What a little bitch. Like, you know, like, you talk about masculinity, man up, you know what I mean? Like, it's— and I have the same thing. I'm like, I, I can't, I'm weak.
All right, if you like that clip, there's a full conversation with a lot more just like that. Just follow my finger, it is right here.
