Andy Steggles on Software Business Sales

Have you ever thought about bringing an outside company on as an investor in your business? If you have, then today’s episode of the E.O. Podcast isn’t one you want to miss. Meet Andy Steggles, president of Higher Logic, a cloud-based community platform that serves associations, non-profits, businesses, and member-based organizations, and author of Social Networking for Non-Profit. Today, Andy will tell you how he strategically took on a BIG investor without relinquishing any control of the company, and explain how you can do the same.  

Time Stamped Show Notes:

00:37 – Dave and Andy go back a long way 02:08 – Dave did a Google keyword search on Higher Logic and results show a number of marijuana-related sites, to be clear Higher Logic is not about weed 02:59 – Dave last saw Andy in Frankfurt at the EO Global Leadership Council Conference 03:36 – Andy is originally from Birmingham, at the age of 15 he joined the Navy and stayed there for 9 years 04:27 – Andy met his wife in Hong Kong when he was based there with the Navy 04:46 – When they went back to London, he got into computers with the goal of being an entrepreneur 05:04 – When they moved to New York, Andy was planning to start his own .com but then the bubble burst 05:33 – Dave says the .com bust is actually what opened the doors to become an entrepreneur for him 06:26 – Dave asks Andy about his childhood 08:15 – Andy’s dad quit driving busses to become a physics teacher (more money) even though driving was his passion 09:03 – Andy’s mom was a cleaner—that’s where he gets his entrepreneurial passion 11:34 – His mom would do everything she could to earn money 12:08 – She got great deals for food and other everyday essentials 13:03 – She pushed Andy to get every job he could and helped him understand to get the most out of whatever was in front of him 14:20 – Andy created holidayhomerental.co.uk during the early days of VRBO or but AirBnB has already disrupted the space 15:08 – He never made a penny from the business but is emotionally attached to it 16:14 – Higher Logic is a community—a combination of Facebook, LinkedIn, YouTube and a little bit of Twitter, it helps you leverage opportunities for engagement in a private, secure manner 17:02 – For example, the American Bar Association uses Higher Logic and has different sections for people including “committees, events, experts and members” 17:56 – There are over a thousand organizations that use the platform with over 50 million users 18:35 – Higher Logic caters to organizations big and small 19:51 – Higher Logic started 9 years ago and they now have 185 employees 20:34 – Private equity contributes $55 million to Higher Logic 21:06 – Andy says they did not give up control of the company 21:22 – Dave says this means less than 50% of the company was sold for the $55 million putting them at a $110 million valuation 24:28 – The quotes Andy received were insane 25:37 – Narrowing down the private equity companies to fit their criteria 27:14 – Do NOT overstate your numbers 30:05 – Play good cop bad cop in asking for a bigger offer 32:31 – The HIGHEST offer is not always the one you should take 34:11 – “What is the best thing for me to do to help build value for the company?” 35:37 – Before he hired someone else to do his job, Andy was asked four questions – (1) how much are you learning on a daily basis, (2) how passionate are you about it, (3) how much value are you bringing to company and (4) is it replicable 36:36 – Andy realized other people can do the job better than him and he has since focused on evangelism, thought leadership, publishing, and speaking 39:45 – Changing the numbers is a very dark, dangerous path to go down 40:40 – Dave says it’s hard to bring different organizations’ cultures together 44:32 – By mid-February of this year, Higher Logic had already acquired two new companies, hired additional employees, and had a company retreat 45:30 – They also got a $20 million line of credit from the equity company that invested in them for $55 million 47:03 – Dave introduces the new lightning round called “Boxers or Briefs” Mac or PC – PC iPhone or Android – iPhone Coffee or 5-hour energy – coffee Tesla or Porsche – Tesla Dre or Dr. John – Dre Power boat or sail boat – sail boat Paper back or Audible – Audible Gym or outdoor fitness – outdoor Beer, wine or whiskey – beer Jeans or khakis – jeans 49:12 – Andy has been accepted to Harvard’s OPM or Owner/President Management course next year 53:16 – By and large, people are inherently good and will do the right thing 55:05 – Connect with Andy thru his email [email protected] or at LinkedIn 55:20 – Dave closes the episode and encourages you to visit his website

3 Key Points:

Never surrender control of your process unless you are absolutely sure it is the right thing to do. A mentor or a business coach is something you must take on in your professional career if you want to reach the next level. The BIGGEST offer is not always the BEST offer.

Resources Mentioned:

Entrepreneur's Organization – The EO Network Higher Logic – Andy’s company