Decoding the Edtech Founder: Keys to Winning PE Deals & Building Trust with Karl Rectanus

Welcome to the Deal Sourcery podcast, where hosts Dan Herr and Matt Rooney engage in a captivating discussion with Karl Rectanus, the former CEO and Founder of LearnPlatform. Founded in 2014, LearnPlatform is an edtech company dedicated to creating meaningful impact through data-driven decision-making. The company quickly gained traction, particularly with the launch of the Edtech Top 40, an innovative initiative that highlighted the most engaged tools in the sector, drawing significant attention from private equity and strategic investors.

In this episode, Karl shares how LearnPlatform’s mission-driven approach not only fueled rapid growth but also led to a successful acquisition. By aligning their business model with impact goals, the company attracted investment that went beyond financial backing, providing strategic support that accelerated their success. Today’s fascinating conversation documents the strategies and insights that propelled LearnPlatform to the forefront of the edtech industry, and showcases the formidable power of impact-driven growth.

Episode Highlights

00:00 The Importance of Impact Centered Decision Making

00:10 Engaging EdTech Founders for Proprietary Transactions

00:41 The Concept of Fail Tests in Entrepreneurship

00:47 Building Authentic Relationships with CEOs

01:00 The Future of Impact Centered Companies in Private Equity

01:12 Key Questions for Engaging and Qualifying Founders

01:41 The Journey from Founding to Exiting LearnPlatform

02:25 The Origins and Launch of LearnPlatform

06:34 Private Equity Interest Sparked by the EdTech Top 40

09:44 The Power of Data Driven Market Insights

11:11 Increasing Inbound Interest from Private Equity Firms

13:38 Screening and Qualifying Potential Investors

16:12 Strategic Partnerships with Private Equity Firms

18:24 Evaluating Outreach Based on Role and Experience

21:01 Aligning Success with Clear Private Equity Strategies

25:07 Setting Expectations and Building Trust with Investors

28:20 Long Term Relationship Building in Private Equity

31:27 Deciding the Right Time to Sell or Raise Funds

34:30 Managing Multiple Potential Buyers in the Exit Process

36:58 The Advantage of Long Term Engagements

42:00 Decision Framework for Choosing the Right Buyer

46:46 Post Exit Focus on Advisory and Board Roles

50:27 Ideal Roles and Contributions in Private Equity Partnerships

52:35 Characteristics of an Ideal Private Equity Partner

56:35 The Next Wave of Capitalism: Impact Driven Organizations

59:34 Defining Impact and Its Business Benefits

01:00:16 Private Equity’s Role as an Impactful Force

Key Takeaways:

"The impact we were trying to drive drove our decision making and helped accelerate the scale of the business."

"Set expectations and then go beat or exceed those expectations."

"I believe in fail tests, setting up not what success looks like, but what absolute failure looks like."

"The best way to build authentic, long-term relationships with CEOs is to be consistent and trustworthy."

"Diversity on the partner level was a benefit for us. We were named one of the most innovative companies in the world."

"The winners in the next 50 years will be those who make the world a better place, not just those with the best financial returns."

"Impact is not just ethically correct, it's good for business."

Links:

Dan Herr: https://www.linkedin.com/in/danielherr/

Matt Rooney: https://www.linkedin.com/in/matt-rooney-coastalpartners/

Karl Rectanus: https://www.linkedin.com/in/krectanus/

Coastal Partners: https://www.coastalpartners.co/