In this interview segment from the My First Million podcast, Sam Parr reflects on his biggest regret in building his company: raising external capital instead of retaining full ownership, which he believes would have made him richer and more greedy. He discusses the value of his extensive investor network and emphasizes the importance of frequent, data‑driven investor updates to keep stakeholders engaged and to signal health, noting that a lapse in communication often precedes a company's decline. Parr also critiques the typical equity split, admitting he gave too little to early team members and suggesting a more balanced distribution—aiming for multiple core employees to receive 1‑4% equity, even if it means taking a larger founder or investor haircut. When asked about location, he says a startup can be launched anywhere, based on personal preference. Finally, he mentions that, in hindsight, working a regular job before founding would have provided valuable experience, saved money, and offered a financial cushion. The conversation blends personal regret, practical advice, and strategic insights for aspiring founders.
Chapters
What's your biggest regret in the way you set up or organized or structured the company?
I wish I wouldn't have raised money and I would have just owned it all.
And why is that?
Because I would be greedier and richer.
Um, you didn't end up needing that capital?
It's hard to say because it worked. It worked. Um, if I wanted to start fresh again, I would have been able to do it. I can start now.
What about advice? A lot of people think, oh, this person's so successful, right? You raised money from a bunch of cool, smart, successful people, either in media or not in media.
Yeah. So that was helpful.
Was that truly like, so did you get your sort of value's worth on the advice component?
Yes.
Because I don't, I'm not sure that that typically plays out that way, but I think you did.
Oh yeah, it works. Okay. So look, our network is so fucking powerful. Me and you, our network is so powerful. I have, I think, 35 investors ranging from Tim Ferriss, the founders of NerdWallet, which is— who knows what that's worth? Billions of dollars. The founder of The Chive, founders of Bleacher Report. Who else? Just look it up. A lot of people. And I text them. I just text them. I'll say—
you get a lot out of them. And I'll tell you two things that you do that gets a lot. First, your investor updates, which you send. You used to send more frequently.
Now I send them quarterly, but before, I—
for monthly, right?
36 months, I sent them every single month.
Every single month. And the— it was so well organized. It was basically like, um, hey, here's all the key metrics. You don't beat around the bush. It's like, this is how much cash we got in the bank, this is how much we made this month, this is how much the email list grew, this is how much our open rate was.
Boom.
That's number one. Number two— and how— what was your second sort of section?
So I would— I— the way that I set it up, I was like, oh, numbers. I go, just here's the numbers. There's no interpretation.
It just What?
All right, let's get into it. Numbers. Boom. Okay, then I go and then I do things that are going well. Things are not going well. I need your help.
Yeah.
Yes or no?
Yeah, it was great. And you sent that to— so you did the work to keep them engaged and stay top of mind. Do not underestimate this. If you're doing your business, if there's people who are willing to help you out, you got to find a way to stay top of mind. And part of it is you share frequent updates and there's a very good sign if you're an investor, if you're one of your companies stop sending their updates for a bit, uh, that company is about to die, or they're on their way to dying, and they go into a shell. And Paul Graham has this great post which is just like, um, as an investor, when you see that, you know it's time to go check in. And as a founder, ironically, that's when you need the help the most.
Yep.
So don't go quiet when you need the help the most. That's when you need to be talking and asking. And, uh, maybe you actually won't die if you, if you could keep that going.
What other mistakes have we made?
Um, So I always regretted the, um, I think that the, the normal way that people give out equity is a little too founder greedy. Um, so I wish I'd given more equity to my team. Um, and so like, you know, basically I wish I had just negotiated it better between what do I get, what do the investors get, and what does my team get? I think it was imbalanced. I think some of what the investors got, the team should have got. Some of what I had, I, the team should have got. Uh, because really like The people who are there as person 4, 5, 6, really, they're taking just as much risk as you are in, in a way. Um, like they were there when it wasn't obvious that this was gonna work. And so for the all-stars, I wish I had given more. And next time, my next company, I'll do just that. I will make sure that core 4, core 5 people, I'll make sure it's not like, like typically in a company—
How big would the pool be?
So I, I don't know exactly what the pool will be, but let's say, let's go what, what's typical. So typical company, 10, 15, 2 co-founders, you start 50/50. You're gonna raise some money. They might end up taking 25 to 30% of the company, um, depending on how it goes. Let's call it 25%. And so, you know, as the founders, you, you've diluted down, you're at, I don't know, my math's bad, but let's say you're both at, uh, what is that? 30-something, 35% each now. And, um, and so you, you know, that's where you're at. And then your team, the option pool, they typically say is like 10 to 15% is your sort of option pool.
Yeah.
So the first few employees might have like, you know, the key person might get like 1 to 3% and then everybody else is below that, is below 1% essentially. And I just think that's like a pretty hard skew. So I would try to get multiple people in the sort of 1 to 4% range. I would try to have like my core, my core team all be in the over 1% range for sure. And whether that means I take the haircut or investors take the haircut. That's what I would do if it's a tech company. I think this is very different if you're not a high-growth tech company.
Would you start it in San Francisco again though?
I'd start it wherever I live. And so if I'm, if I want to live here, yeah, I'd start it here. Um, if I wanted to live somewhere else, I'd start it somewhere else. Now you can start it definitely anywhere. So it's just about your preferences.
I, if I was gonna start again, another thing that I would do is I would go and get a job somewhere and just make— like, when I started, I hadn't— I didn't— I was always self-employed mostly. Um, I wish I would have worked somewhere maybe for a little while before you did it, or you mean as a—
do something as a side hustle before? Oh, you just get the experience?
Yeah, I think it would have been nice and save money.
That's interesting. I wouldn't have thought you'd say that.
I think it would be helpful, um, to, to understand how things work.
I think if you did it for 3 months, you'd be like, okay, I'm done.
