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My First Million

My $100M Mistake + 6 Company Exit F**k Ups To Avoid (#522)

Episode 522: Shaan Puri and Sam Parr play the drinking game “Never Will I Ever,” revealing all the painful mistakes they made when selling their +$10M companies.

Shaan PurihostSam Parrhost

Nov 24, 202351mWatch on YouTube

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CHAPTERS

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Chapter summaries

Never Will I Ever: selling mistakes as a game (and why they’re sharing them)
The hosts set up a “Never Will I Ever” drinking-game format to surface hard-earned lessons from past exits. They frame the episode as a guide to common sale-process mistakes they personally made and don’t want others to repeat.
- •They’re focusing on how not to sell a company, based on their own experiences.
- •They position the format as “Never will I ever do X again,” tied to real exit mistakes.
- •They briefly reference multiple exits across different types of buyers (large companies and private buyers).
QSBS: the tax break they wish they hadn’t ignored
Sam introduces Qualified Small Business Stock (QSBS) and explains why it can dramatically reduce capital gains taxes. Shaan adds detail about how the exclusion works and how it can be expanded across tax returns, while noting there are caveats and uncertainty about future changes.
- •Sam explains QSBS basics, including the holding period and eligibility framing he learned late.
- •Shaan clarifies the first portion of gains can be excluded and notes some states honor it while some don’t.
- •They discuss the “$10M or 10x basis” concept and how it changes the magnitude of the tax shield.
- •Shaan describes strategies like using multiple tax returns (e.g., via trusts) to “stack” exclusions.
- •Sam flags an asterisk: QSBS rules could change and may not last indefinitely.
Don’t just shut a company down—try to sell it first
Shaan describes shutting down a product with real traction instead of exploring acquisition options. He explains how, in retrospect, they should have spent time talking to potential strategic buyers rather than making a “non-decision decision” to walk away.
- •Shaan recounts building an avatar/sticker-style app with a fast early download spike but limited long-term stickiness.
- •They tried to make it a standalone messaging app, which made distribution and switching costs too hard.
- •Shaan argues they should have pitched the feature/tech to existing messaging platforms instead of shutting down.
- •He contrasts their choice with the idea that similar products can succeed as integrations rather than standalone apps.
- •He calls the mistake especially painful because they didn’t even explore options before deciding.
Putting out desperate vibes kills leverage in negotiations
Sam explains how wanting an exit too badly made him act desperate and lose power. Shaan expands this into negotiation rules: you must be okay with no deal, and the side that cares least tends to win.
- •Sam describes tying emotional and financial identity to the exit and how buyers can sense that weakness.
- •He says having multiple options is the most tactical way to avoid desperation; the other is internal mindset.
- •Sam shares a personal ritual that helped him feel less desperate during the process.
- •Shaan says option one must always be “no deal and we’re fine,” even if you have to convince yourself.
- •They emphasize the ability to walk away as the foundation of negotiating power.
Highest offer vs best offer: red flags, closing risk, and the “discount factor”
Shaan argues the highest price isn’t necessarily the best deal, especially if it’s unlikely to close or involves low-quality counterparties. He shares a story where they accepted a higher offer, encountered red flags, and ultimately returned money—then explains how he learned to discount offers by closing probability.
- •Shaan distinguishes “best offer” from “highest offer,” emphasizing close probability and counterparty quality.
- •He lists red flags from a high-offer process, including odd legal process and credibility concerns.
- •He describes wiring back millions after deciding to walk away from the higher offer they initially accepted.
- •He shares advice from Balaji: compare offers on the same timescale and apply a discount to newer/less-proven offers.
- •Shaan describes evaluating where a deal is in diligence/negotiation to reduce uncertainty in the comparison.
Who’s really buying? Corp dev isn’t the decision-maker
They discuss how large-company acquisitions often route sellers through corporate development, which is helpful but not the true decision authority. Shaan stresses the importance of identifying the internal champion and the real reason the deal matters inside the buyer organization.
- •Sam describes selling to a public company and interacting with corp dev as the main point of contact.
- •Shaan says sellers often mistakenly assume the person they’re talking to is the buyer/decision-maker.
- •He explains large companies may intentionally add layers that create negotiating advantage for the buyer.
- •Shaan argues you must find the internal champion and understand what motivates them to push the deal through.
- •They note corp dev incentives differ from the founder’s incentives and you should make it easy for them to look good.
Winning negotiation by tolerating discomfort (and a stubbornness story)
Shaan and Sam compare their negotiation styles, with Shaan pushing for precision and being willing to sit in discomfort. Shaan illustrates the power—and risk—of stubbornness with a story about watching his dad negotiate by repeatedly saying “no,” then taking it so far it nearly backfired.
- •Sam recounts learning from Shaan’s approach: pushing hard even on wording because “everything mattered.”
- •Shaan frames negotiation as finding non-binary tradeoffs—what each side cares about most vs least.
- •They discuss the idea that whoever can be most uncomfortable can gain an edge.
- •Shaan tells a detailed story of his dad using “no” as leverage against a polished counterpart.
- •He notes an overplay risk: taking all the value can cause the other side to walk, so leaving something matters.
Due diligence punishes mess: why being disorganized drags deals
Sam describes how operational messiness becomes brutally painful during diligence, when buyers demand years of records, agreements, and proof everything was done properly. Both hosts emphasize that a clean, orderly presentation prevents doubts that can derail a transaction.
- •Sam explains buyers provide extensive diligence checklists and each item matters.
- •He uses switching payroll providers repeatedly as an example that made exporting records much harder.
- •Sam says even small issues (like a one-off freelancer payment) can matter for compliance and risk reasons.
- •He describes how limited confidentiality during a sale forces a small team to grind through diligence work.
- •Shaan adds that skipping basic legal/administrative steps can create tax and IP complications later.
“Now it’s time to sprint”: turning your company into a one-click buy button
Shaan shares advice he got from an experienced seller: the offer is the starting line, not the finish. He explains the importance of building an organized data room and anticipating buyer questions so the purchase decision becomes easy to execute.
- •Shaan recounts being told that receiving an offer means the hard sprint is just beginning.
- •They note the time from initial interest/offer to getting paid can take months.
- •Shaan explains the “giant buy button” concept: organize everything so buyers can quickly say yes.
- •He emphasizes reducing open questions and half-complete information to avoid deal fragility.
- •Shaan describes a short period where he intensely organized the business to make diligence smoother.
Don’t run the business like a personal piggy bank if you want to sell
Shaan warns that aggressive “tax stuff” and personal spending through the business can destroy the clarity of financial statements and margins. He argues messy books create asterisks buyers must unwind, increasing friction and skepticism during a sale.
- •Shaan describes the temptation to spend money through the company to reduce taxes and how it can distort profitability.
- •He recounts examples of complicated maneuvers that make a business look less profitable and harder to evaluate.
- •He argues buyers don’t want to purchase a “hot mess” with unclear add-backs and questionable history.
- •Shaan says you can’t easily undo years of messy financial behavior once it’s embedded in the records.
- •Sam adds an example he cites about a seller getting penalized because the business owned personal assets.
Close deals in person: “get on a plane” (even when it’s inconvenient)
Shaan argues that in-person meetings can be the difference between a stalled conversation and a closed deal. He tells stories where travel—and even literally running to a meeting after a car breakdown—helped rebuild momentum and trust that wouldn’t have happened over remote calls alone.
- •Shaan states the rule: don’t stay home when there’s a deal to be closed; prioritize in-person meetings.
- •He describes respecting counterparties who proactively offer to meet face-to-face and make it easy.
- •Shaan recounts re-opening a prior deal by arranging an in-person coffee meeting.
- •He tells a story of his car breaking down en route, then running to the meeting—and believing the sale happened because he showed up.
- •They close by noting they’ll continue doing topic-driven episodes and invite feedback.

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