Ep 471 Exit Story: Kaelon Egan on Selling AccelaSchool to PowerSchool, Targeting Strategic Buyers, and Avoiding Earn-Outs
Dec 6, 2024
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Kaelon Egan, founder of AccelaSchool, shares his journey of successfully selling his company to PowerSchool, a leader in K-12 education technology. He discusses how to position a business for strategic acquisition and the importance of understanding buyer needs. Egan also reflects on navigating the complexities of the education sector's sales landscape and the value of advisory networks. He emphasizes avoiding earn-outs and the significance of clear sale structures, offering insights into leveraging AI opportunities in a post-pandemic market.
Kaelon Egan successfully positioned AccelaSchool for acquisition by PowerSchool by ensuring product alignment with their existing ecosystem and architecture.
His decade-long experience in educational institutions facilitated a bottom-up sales strategy, emphasizing relationship-building to influence decision-makers effectively.
Deep dives
Positioning for Acquisition
Kalen Egan strategically positioned his company, Excella School, to appeal to PowerSchool, a major player in educational technology. By aligning his product, eCollect Forms, with PowerSchool's ecosystem, he ensured his software complemented their existing offerings, making it more attractive for acquisition. This involved making intentional decisions about the architecture of his product to directly integrate with PowerSchool's platform, enhancing its unique value in the market. Kalen understood that by focusing on his target customer base, he could create a compelling case for a successful acquisition down the line.
Navigating Bureaucratic Sales Cycles
Selling to educational institutions often involves lengthy and bureaucratic processes, requiring a deep understanding of the market. Kalen relied on his decade of experience working within a school district to effectively navigate the sales cycle and relate to the challenges faced by decision-makers in schools. He emphasized the importance of building relationships with end-users, allowing them to advocate for the product, which ultimately simplified the journey to the decision-makers. By adopting a bottom-up sales strategy, Kalen was able to demonstrate the product's value to those directly experiencing the pain points, making it easier to secure approvals.
From Partnership to Acquisition
Kalen's initial conversations with PowerSchool began as a potential partnership, focusing on joint benefits and success criteria. However, these discussions quickly evolved into a more serious acquisition dialogue, signaling a shift in the nature of their relationship. Key indicators included discussions about deeper integration of their products, moving from a pilot partnership to a much broader commercial transaction. This evolution highlighted the importance of recognizing and responding to signs that partnership conversations could lead to acquisition opportunities, allowing Kalen to prepare and navigate the process effectively.
In this week’s episode of Built to Sell Radio, John Warrillow interviews Kaelon Egan, the founder of AccelaSchool, who successfully sold his company to PowerSchool—a giant in the K-12 education technology space.
For most founders, the ultimate dream is to sell to a strategic acquirer: a well-funded, industry leader with deep pockets. Egan shares exactly how he positioned his company to become a natural acquisition target, avoiding common pitfalls along the way.
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