Sam runs a solo masterclass on how to sell a company, repurposed from a HustleCon 2019 talk and updated with Milk Road exit lessons. The framework is the DENNIS system: Demonstrate value, Engage physically, Nurture dependence, Neglect emotionally, Inspire hope, and Sell. Sam covers when to sell, how to categorize buyers, how to run a parallel sales process, how to frame yourself as the solution to the buyer’s problem rather than pitching features, and how to close without burning bridges.
Speakers: Sam Parr (host, solo)
Why You’re Not Instagram [00:00:00]
Sam: This is a masterclass on how to sell a company. My first masterclass was about raising money — how to create a killer pitch deck. This is the end of the journey: how to actually sell.
I’ve sold two companies. The first was to Twitch, which is owned by Amazon. The second was Milk Road — sold to two private buyers, independently wealthy guys from their own exits. Completely different transactions. I’ll share lessons from both.
I always start with this picture: it’s the first photo ever posted on Instagram. Kevin Systrom posted it when the app went live. If you’re Kevin Systrom — a dozen employees, a billion-dollar offer, everyone loves you, people are knocking at your door — his advice on how to sell would be: build a sensational product and people will just come offer you a billion dollars.
You are not Instagram. This talk is for you.
You’ve tried, you’ve pivoted, you’ve hustled. It’s not working, or it’s kind of working, or it’s working but you’re tired and ready to move on. That’s a common place for entrepreneurs to end up. The advice you always hear is “great companies are bought, not sold.” True for Instagram. But most companies are sold, not bought. That was my experience both times.
Do You Even Want to Sell? [00:06:00]
Sam: Before running a sale process, ask: do you even want to sell? When you started, you had four beliefs:
- This is going to work.
- This will be big if it works.
- I can do this.
- I want to do this more than anything else.
Check in on those. Don’t do it on your most frustrated day. Ask yourself: are these more true, less true, or the same as when I started?
When we sold our first company, number two was wavering — I thought we might have a medium-sized exit. And I asked myself: do I want to grind for four more years for a medium outcome? No. So we sold.
With Milk Road, it was number four. The business was actually working. But my brain was wandering to new ideas, and I was loving the podcast so much that I realized: is this the one thing I want to wake up and do every day? No. So we sold.
Three situations where selling makes sense: you get a great offer and you’d be crazy not to consider it; you don’t believe in the business anymore; or you just don’t want to run it anymore and you prefer an exit over hiring an operator.
Who to Tell [00:10:00]
Sam: Managing your own psychology during a sale process is the number one most important thing. It’s what helps you negotiate. It’s what lets you stand up and operate every day while simultaneously running a deal process.
On disclosure: tell your co-founders immediately. Investors, tell them you’re exploring a sale. Your team — be careful. People start behaving differently. They wonder: should I be looking for a job? What does this mean for me? If I had to do it over, I would only tell my co-founders until the deal closes, not the team.
Build a communication table:
- Co-founders: tell them ASAP
- Investors: tell them you’re exploring a sale, here’s what it might look like
- Employees: wait until the deal is close or closed, then frame it clearly with the good news
The DENNIS System [00:15:00]
Sam: The framework I use is the DENNIS system. Dennis Reynolds from It’s Always Sunny in Philadelphia. The system:
D — Demonstrate Value E — Engage Physically N — Nurture Dependence N — Neglect Emotionally I — Inspire Hope S — Sell
D: Demonstrate Value
Why do companies buy companies? Financial reasons: they want your EBITDA, your revenue. If you have it, great. Many people don’t.
Strategic reasons — this is where most deals actually happen:
- The CEO finds it interesting. Surprising how far this goes. CEO has a pet project, an itch to scratch. If you’re so lucky to have that, it’s fantastic.
- A new executive or recent promotion. They need to signal big moves. They’re looking for something to demonstrate they’re on the way up (or avoid being on the way out).
- Trying to catch up to a surging competitor. Adobe buying Figma to catch up on design tools.
- Synergy — one plus one equals three. Uber buying Didi China so they stop competing and can instead raise prices.
- They’re afraid of you. Facebook buying Instagram. You do what they do but better.
- Unique talent. You have computer vision PhDs they can’t recruit at scale. Cheaper to acquire you as a proven team than to build from scratch.
Figure out, for each potential buyer, which of these might be the reason they’d buy you.
E: Engage Physically
There are four buckets of potential buyers:
- Unicorns — high-growth companies that want to accelerate growth
- Dying dinosaurs — incumbents that need fresh tech, fresh energy, fresh cash flow
- Adjacent alligators — peers or competitors you might merge with
- Talent farms — Google, Meta; they don’t care about your market, just your engineers
Know the roles on the other side:
- The exec champion: The one person pounding the table saying “we need to do this deal.” If you can’t identify that person, there’s no deal. Find them and nurture that relationship.
- The company router: Corp Dev at big companies, or whoever can get you to the people who need to sign off.
- Your deal doula: One or two people in your corner who’ve done M&A before, who you can text at midnight asking “is this phrasing too desperate?” They help you through the process without burning.
How to engage: say “I want to discuss a partnership on how we might be able to work together.” That’s the soft entry. The more aggressive frame, which I’ve also used: “We have an acquisition offer on the table. We’re considering our next steps — raise money or accept it — but we’d love to talk to you before we make a decision.” They say: yes, come in, we want to know our options.
Your only goal at this stage is to get an in-person meeting.
N: Nurture Dependence
You want lust, not love. High-burst, immediate desire. And you get there through clarity, not manipulation. You’re framing what you do in a way that is maximally appealing to them — speaking to their desires, their pain points, their strategic anxieties.
Find their pain. Offer a cure.
When we were selling to Twitch, I got Corp Dev to arrange a meeting with the CEO. Before that meeting, I tracked down an exec at Twitch I’d met at a party in Australia. I grabbed a beer with him and asked: “You’re in the room for the big decisions — what are the top three priorities right now?” He told me. Then I asked: “Which one feels weakest? Which one needs the most help?” He told me exactly which problem they didn’t have a great solution to.
The next day in the CEO meeting, I didn’t present a generic pitch. I said: “We do this one thing, I’m a strong technical leader, and we already have the team and the technology built to solve the problem you just told me you don’t have a good plan for.”
Most startups walk into acquisition conversations and say: “Here’s what we do. Here’s our feature list. Here’s what this person says about us.” That doesn’t tell the buyer why they should want you. Package yourself as the solution to their problem.
Do the work for them. Don’t just present and pray. Write a one-pager explaining where this deal makes strategic sense from their point of view. Have your team write a technical one-pager: here’s everything we’ve built, how long it would take anyone to rebuild it, what the special sauce is. Turn your team into a dating profile. And I actually wrote a CEO memo — the kind Amazon makes you write — outlining how I’d announce this acquisition to their company. It forced me to articulate the logic clearly, and it handed them the work of persuading their own organization.
Make yourself a giant buy button. One-click checkout. No friction in understanding what you do, who your team is, why this makes sense, and how to execute it.
N: Neglect Emotionally
Never be all-in on one partner. That’s how you get no deal or a bad deal.
Run multiple conversations in parallel. Start with 10 to 20 potential buyers. Narrow down. Try to get multiple offers arriving in the same week so you can create competitive pressure.
Go a little cold sometimes. Not too long — don’t kill momentum — but making them sweat briefly is not a bad thing.
I used to leave breadcrumbs. Check into my Instagram story in Seattle. “Never been to this office before!” They’d see it and think: he’s at Microsoft. He’s at Facebook. He’s talking to our competitors.
I don’t know if that worked. But it amused me.
I: Inspire Hope
Now you go back to your preferred buyer and say: “We have other options. But we want you. Can you get your offer a little stronger here, here, and here? We have a time constraint — there’s another offer on the table and they’re not going to wait. If you can move, we would like to work with you. But Bird in Hand.”
Use the leverage from one deal to get a better deal from the one you actually want.
S: Sell
Have your data room clean, your due diligence materials ready, your lawyer and accountant good to go. And don’t burn bridges — deals fall through constantly. When we sold Milk Road, we ended up going back to a buyer we’d rejected at the last minute. We hadn’t burned that bridge, and they hadn’t either. We came back, they were still interested. Done.
When you get a term sheet, your instinct is to relax. Don’t. This is where you sprint the hardest. Cancel everything else. Spend all day on lawyers, data room, accountants, solving any friction. Momentum is everything in deal-making. The speed with which you follow up and move things forward matters enormously.
After it closes: celebrate. The whole process is so stressful that the dominant emotion is usually just relief. Let the relief subside. Then let yourself feel the joy. You did something genuinely amazing.
Key Reminders [01:02:00]
Sam: A few things to keep in mind throughout:
- Birds fly, fish swim, deals fall through. That’s what deals do. Don’t get emotionally too high or too low. They fall through. That’s normal.
- Momentum is everything. The speed of your follow-ups and materials matters as much as the content.
- One choice is no choice. If only one buyer is realistic, you have zero leverage. You need options. Build them.