I Sold My Company For Millions... Here's What I Did Wrong
In this candid conversation, Sam Parr reflects on the high‑stakes process of selling his startup, dissecting the strategic and emotional missteps that cost him millions. He explains how naming a valuation range first anchored the negotiation and led to a low opening offer, how his emotional fatigue drove a rushed, "flip‑now" mindset, and how a time‑boxed 45‑day sale added pressure. Parr recounts specific interactions with potential acquirers—HubSpot, Facebook, Amazon, and Twitch—highlighting a critical misuse of the term "acqui‑hire" and how he recovered from it. He describes alternative anchoring tactics, such as subtly signaling competing interest without revealing numbers, and shares a vivid anecdote about a broke engineer who negotiated from a position of desperation, illustrating the power of scarcity. Throughout, Parr emphasizes the lack of formal guidance for CEOs during the "landing" phase of an exit, likening it to piloting a plane without a landing manual, and offers concrete lessons on negotiation, timing, and mindset for future founders.
Chapters
This one comes from Dylan. Dylan asks, how do you negotiate the value of the company you're selling? So how did you come up with the price? How did you get to a price with your company when you sold it?
I made a huge mistake. I made a classic mistake. I said the number first. I said, these companies typically sell for blank X and blank X. And of course, the first offer—
they asked you like, what's your, what are your expectations? Or what's a range? What do you, what price would you be happy with? What are they at? How do they ask it?
I don't even know if they asked it, but I said, oh, you know, I was like, I think I said like, look, like it's, I'm not, I said, I'm not gonna mess around. Like, so these companies typically sell for blank to blank. So if you're in the market, let me know. And the first offer was the low number of that.
And the last offer, was it the high number or somewhere in the middle?
In the— well, so it was in the middle, but like the thing is, is that when we sold the company, the HubSpot stock was $350 and basically a week later it was like, you could look it up, it was like $550 and then like 3 months after that it was like $850.
Right.
So like it, it changed the, the sale price was one thing, but it pretty much changed quickly, but it was like right in the middle of that number. But, um, I made a huge mistake. I should not have done that. And as soon as I said that, I was like, fuck, fuck, fuck.
And you said it in an email.
Did I say it in the email?
I think you said, I think, I don't know. It sounds like the story you're saying, you said it in an email.
I don't remember. No, I think I said it on the phone and the woman who I'm now friends with who was doing the deal fucking latched onto that like a shark and she tore and I knew it. And afterwards I'm friends with her now. She doesn't even work at HubSpot and I'm like, You, you got me on that. She's like, yeah, like you said the number.
And a great thing to do is after you negotiate a deal, go talk to the person once you're— once you're pals and you're on the same team, say, look, we're on the same team for sure. Uh, but man, negotiating that was so, you know, confusing for me. Uh, what did I do poorly? You know, like, what would you have— what do you think you would have gone up to? Make me hate myself. What would you— what do you think you could have gone up to? And you just ask a bunch of questions to try to suss out what got them interested, what made them hesitant, how they figured out the value, what they were willing to negotiate to, what mistakes you made in negotiation. 'Cause you get so few reps at negotiating, it's important to do that. But it sounds like to answer Dylan's question, you did two things. You said first you looked up comparables, so you found out comparable sales. So that's how you got a range. And then you made the fuck up in your actual negotiation of that range to fit to like, you, you, you actually set the proper range and It probably cost me, it cost me many millions of dollars.
Right.
It's like that one decision you made actually was more important than like the previous 2 years of operating probably.
Yeah. A bunch of— I don't like thinking about it, but yeah. How did you do it?
Um, we, I did not say a number right away. Um, I fucked up in one regard, which was I let my emotion. So when we, so the way we decided to sell was, and there was nobody coming and knocking on our door. Saying, we need to buy you, you're the best. Uh, we, we, we're, we wanna be in the business of you. I was basically, frankly, I saw the writing on the wall for my business. I was like, okay, I think this is not zero, but it's not gonna be huge. So what do I wanna do? Do I wanna ride out a middle of the pack, like small, like medium-sized outcome for the next 5 years? Or can I just go flip this thing now? And I decided I wanna go flip this thing now. I was also really tired because I had been doing, I've been trying to find product market fit with different startups in our Idea Lab. For like 6 years. I was ready for a change in general. And so I told my investor, my co-founder, I said, hey, I wanna sell this thing. I think it's time. And they were like, okay, if you wanna sell, then let's sell. And I said, all right, let me, let me run a process. I'm gonna try to sell this in the next 45 days. So first that was good because I timeboxed it, but I also, you know, like, uh, it added a lot of pressure. And so the mistake I made when I was figuring out how, how to sell, I was, I let my emotions of the day dictate how I sold, how hard I sold the company. So what does that mean? At first I was super confident they're gonna want to buy us. So I went to 2 or 3 companies with my super like swagged out, uh, like cocky, cocky like pitch basically, which was sort of like, yeah, everybody wants us, but like, you know, so if you guys are interested, you know, you, you basically like you gotta let us know because this is moving fast with, you know, these other people. So you, we, we got approached, we're interested, we might go that path. It, you're either gonna get on the train now or you're gonna miss it. So I was like kind of cocky confident that was like working, but then like 2 days would go by where like somebody, you know, they didn't text me back or they said they were gonna review the thing and email me and they didn't email me. So then I started to have, have doubt creep into my head a little bit. So then I would like kind of like, it's like a booty call, like desperation, reach out to some other company. And so one of 'em was I reached out to Facebook through somebody I know, and I was sort of like, hey, like, you know, we're going to sell this thing. I used the word aqua hire, which was like the wrong word to say because aqua hire means a specific range of what outcome you're going to get. And it basically means don't value my company, just value my talent. And I shouldn't have done that. I should not have said that there. I was luckily able to recover because it was such a big company that by the time he made the intro to the person who made the intro, I had like changed the narrative completely. The third guy was like, yeah, you guys looking at Akihabara? I was like, I don't know where the fuck you got that. No. And it's like, I literally had sent an email and it was, you know, with myself saying that, but I luckily was able to change it. And actually they, they came in with the— Facebook came in with the highest offer. And so we— so I ended up recovering from that mistake, but that could have been critically bad, which was—
you wish you would have taken the Facebook offer?
No. Uh, like the Amazon offer ended up working out great, but, um, You know, whatever. It was a good deal, uh, in the end, I guess. But, but that was the main thing. And I didn't have a comparable. I didn't have comparables really. I kind of— the comparables I heard were such a huge range that I was like, okay, I just need to forget I heard any of those numbers because it's too wide of a range. It just means like, it depends. And so then I started negotiating. I didn't say the number first, and we waited till we got offers They tried to get a number out of us, but I was like, not gonna do it. And, um, I was anchoring in other ways besides saying the specific number. I was like leaving little hints or kind of just like, you know, just making sure they knew that we had other interests. And eventually once we got one offer, I was like, okay, that's a ballpark. And then I basically just texted the CEO of Twitch and I was like, hey, I'm gonna take this other offer unless you can match. And, uh, he's like, you know, give me some time. Let me give, gimme some time. I was like, I don't have time. And he's like, oh, gimme an hour. And I was like, okay, I'll give you the hour. And, uh, and then he came back with an offer that wasn't quite a match, but it was good enough where I said, okay, all other factors considered, we think this is the best because they were gonna take more of our team and other stuff that the other one wasn't gonna do.
What a stressful— it's such a stressful period.
Yeah.
It's such a stressful period. Yeah.
Nobody teaches you how to do this. And it's like the most important thing you'll do as the CEO of your company is land the plane. But it's like being a pilot and you learned everything about takeoff and flight and you've never heard anyone mention how the fuck you're supposed to land. And so you're like just kind of pointing downwards and you're trying to land the thing based on like instinct and then like a few fuzzy messages you get from mentors. Or you use like, if you use an investment bank, it's different. But we were not at that size. You gotta be doing like $50 million to $100 million minimum in your sale price to be, um, to be, to have a banker who does it for you.
Dude, I had this roommate named James and like, he was like a stoner pothead and like, like the first day of work at his new job, he went and he had a t-shirt that said, I heart weed. It just really big. I love weed instead of I love New York. And, uh, he, um, he was negotiating a salary for a company, Vungle, Jack's company that I introduced him to and he'd been unemployed for 10 months. And he'd been struggling to find a company that he wanted to work at. And I think he was using like his mom's credit card to pay the bills because I would get like, uh, his statements and like, so I thought like maybe things were going south for him. I'm like, dude, I don't know if you have much money left. I don't know how you're gonna pay rent. And Vungle made him an offer for like $190,000 to be an engineer at their company. And he told me and he goes, Are you gonna take it? And he like exhales weed and he was like, "I don't know, man, I'm not sure if it's worth my time. I wanna make him sweat a little bit." And I was like, "James, are you kidding me, dude?" I'm like, "You don't have any money. You've been interviewing and talking to companies for 10 months. You're screwed." He goes, "Yeah, let's make him sweat." And I get a phone call from the recruiter who I introduced him to and he goes, "Dude, James is like a hot engineer right now. Like, I don't know if we're gonna be able to land him. Like, he's just bargaining so hard and I don't think we're gonna get this guy." and I was like, I put the phone down and I go, James, do you hear what they're fucking saying? You better come to an agreement soon. And I go, well, you know, just give him what he wants. Like, who knows? Just give him what he wants. You know, you just gotta land him. And I hung up and they ended up upping his offer and he negotiated from a place of having nothing and he didn't care at all. And I learned from him that day that that's actually a really good place to negotiate from so long as you're willing to accept these horrible consequences.
Yeah. I gotta actually say that that was the most useful thing. Like how we sold our company was I was totally okay if nobody bought it cuz I was kind of excited. About just ending it and going and doing something completely different. Like, I was kind of like a maniac in that way. I was like, okay, look, if we— if I got zero millions out of this, if I got zero dollars, I'm actually kind of excited about that path too. So I was like pretty free in that way. Whereas I think you had a real business that was producing real revenues and profits. You didn't have that option of like not a good— like, you know, not getting a good offer. You needed—
dude, I felt that way though, where I was like I'm done. I'm out. I was like, I, like, I just, I need to get out of here. So I, I felt the same way as you, uh, and I'll learn a little bit differently how to run things so you don't get burnt out.
