This Entrepreneur Sold Her Startup For $100M After Just 5 Years
While startups like Uber and Airbnb have some pretty big valuations, 10 years later they still haven’t achieved an exit. This entrepreneur was in and out of hers in just five.
Lori Torres is the founder of Parcel Pending, which sold to a public French company for $100M in early 2019. I had the great pleasure of interviewing Lori on the DealMakers show, where she told us about her fundraising, surviving the due diligence, problem solving and company culture. Listen into the full interview here.
Lori Torres, skipped the undergraduate degree and went right into working prior to obtaining her MBA. She was fortunate to find Pepperdine University, which allows entrepreneurs into their MBA program based upon their work experience.
Having been an executive of a billion dollar a year company, and overseeing 1,200 employees, she certainly had that experience.
While very accomplished already, Lori has always been one to look for the next opportunity to move up and achieve what others say is impossible.
She started out early, saving up money to buy her own condo, then falling into the real estate industry. There she quickly moved up the ranks from receptionist to property manager, handling the operations of high-rise office buildings, retail and industrial buildings, self-storage facilities, and multi-family apartments.
It was an amazing experience because I ended up with advisors and friends through the process. Then, of course, I learned some of the fundamentals
She wound up at The Irvine Company, a very prestigious high-end developer in California, where she became Senior Vice President.
There she really learned the necessity of details, and importance of focusing on the details. Something which is very hard for many entrepreneurs who have more of a visionary and a big picture strategist brain. Yet, she found when you set those high expectations, people rise up to that. Her attention to detail also allowed her to see an emerging problem that became her startup idea. She quit, and for a time juggled her MBA, her startup and working 15 to 20 hours a week in another company to support her family . People thought she was crazy, because no one leaves an enviable executive position to go start something new with zero salary, though it clearly paid off.
The problem that Lori saw was that people were shopping online at home in their pajamas, and then heading off to work. Property management offices were getting inundated with packages. They were buried in all this extra work managing people’s mail and online deliveries. With the only real answer for property managers at the time being to take away more leasable space to hold them and spend more on labor to cope with all the incoming. Not a very profitable solution. Of course, the carriers have been incredibly burdened at the same time, and we’ve all heard the horror stories of lost gifts during the holidays or have tried to order something online, pay online, and pick it up at the store, only for it to not be there. Try explaining that it’s not your fault when your daughter’s birthday present is vanished along with the money you paid for it.
Parcel Pending solved this with electronic smart lockers to manage packages. You’ve probably seen them somewhere already.
No carriers come and put a package into these lockers through a touch screen. Once the package is in, it sends you a text or an email. Then you can pick it up at your convenience. These lockers are now not only in apartment buildings, but in retail and grocery locations, corporate campuses and universities.
Launching your own startup is always scary. After being in for a few hundred thousand dollars, Lori says it was even scarier, and they needed to raise money. She was recommended to check out Tech Coast Angels, and from pre-screening to money in the bank Parcel Pending raised $1.3M in just seven weeks.
They then did a strategic round with a real estate company. Lori told DealMakers listeners she went in thinking they needed $2M. The CEO of the company said, "No, you're not thinking big enough. I need you to go back and think bigger." They went back, with a plan for taking $5M, and were met with the same answer. They ended up with a $15M funding deal. After that, you might still lose a lot of sleep as an entrepreneur, but you won’t have to lose sleep over not having money and not making payroll for a little while.
That put Parcel Pending on the fast track, and they’ve had 70% year-over-year growth every single year the last five years.
Parcel Pending was bought by Neopost. A deal this founder hadn’t considered making for another 18 to 24 months. They were on the way to $100M in revenue, and just wound up in this crazy 32 day sale over the Christmas holidays after the persistence of Neopost and finding a good match.
Of course, what they don’t tell entrepreneurs going in is that an exit is a lot of work. It is one of the most stressful and time consuming experiences you’ll go through. All of the starting up and fundraising before was really just an exercise for this moment.
certainly, not an easy process and not one without sleepless nights. I think
Lori says “during the entire deal process, there probably was not a night that had more than four hours of sleep.” It meant 5:00 am conference calls, every morning. In person meetings, including with the CEO who flew in from France, and of course, negotiating, negotiating, negotiating on the finer parts of the puzzle.
That’s all while trying to keep up a business with 2,700 locations across 48 US states and in Canada, and processing around 1.5M packages a month through these lockers.
That can bring a lot of deal fatigue, especially if a sale isn’t as fast as this. It can also make you a deal junky and create a whole new passion for business.
Lori’s top tip for new founders · The gift of competing with Amazon · How to handle an ‘all-hands’ meeting when you have nearly 200 employees · The workplace culture that won Parcel Pending the title of Best Workplace in Orange County, for the last three years
