The Entrepreneur Who Sold 3 Companies

With each sale, Rod Drury’s gaze was raised as he realized how much bigger he could build his companies.

His first big entry into entrepreneurship came when he and 2 partners each kicked in $10,000 and launched Glazier Systems, a software development and consulting company. What allowed it to grow with little capital is the same thing that limited its eventual growth: the business depended on human capital, mainly its founders’.

So after selling the business for $7.5 million, Rod wanted to create a software business, because with software every bit of growth doesn’t come from a similar growth in human capital. He launched AfterMail, with made Outlook email much more searchable and sold that business to Quest Software for $15 million plus an opportunity to earn more. (Listen to the interview to learn why he didn’t get more.)

Working with Quest showed him how much bigger a company can get, so he decided to build a business that he wouldn’t sell outright. After launching Xero, the online accounting web app that he currently runs, he decided to take it public. By selling shares to the public, he was able to raise enough money to build his biggest business yet. Listen to the full interview to hear how he built each company and what he learned along the way.

Rod Drury

Rod Drury


Rod Drury is the Founder and Chief Executive of Xero, the online accounting system that businesses and their advisors easy access to bank transactions, invoices and reports. sold his award-winning email archiving software company, Aftermail, to USA publicly listed company, Quest Software. In 1995 Rod developed one of New Zealand’s first Microsoft development companies, Glazier Systems, which was acquired by Advantage Group in 1999 and continues today as Intergen. In 2000, Rod co-founded Boston based Context Connect, which holds several mobile directory patents.


  • I like the “being an entrepreneur is a series of steps”.

    I got a bit lost when he was talking about api's etc, but then he seems pretty smart :) I wish I had a brain like that!

  • netsp

    Earlier on in the interview and a few time later, Rod mentions arbitrage.

    In the first instance I think what he meant was that large public companies are generally valued at higher multipliers then small private companies. Since the value of the company is usually set by the market as if using a fixed multiplier (more or less), buying an additional revenue stream (the smaller company) at a multiplier lower then their own is an arbitrage opportunity.

    Later on, I'm not entirely sure what he means.

    My hunch is that companies of different size or type have different multipliers. Therefore, it is an arbitrage opportunity moving the revenue from one category to another either by acquisition or change of company direction.

    He calls it “arbitrage” but I suspect that what he means is actually something slightly different.

    I wish you two had expanded on this topic a bit. It's an area that I'm interested in but I haven't been able to find much info on.

  • buraddo

    Keep asking the honest questions, drive down into the detail and always ask for clarification if you don't know.

    These things make your interviews refreshing to watch.

  • AdamBurmister

    Great interview Rod and Andrew.

    Really interesting stuff on the trade-sale earn outs not often being achieved. Good advice there for when I get to the stage of a product.

  • Cyri Deblois

    No more transcript ? My English is not good enough to get everything just in audio !

    Keep up the good jo anyway !

  • I enjoyed his fairly candid responses on how he raised the $15m (?) while still maintaining a “tightly held” company. There is so much content available on angels and VC funding, and really no content on Private Placement offerings, where entrepreneurs go straight to individual accredited investors, like he did. I feel very privileged for early on in my life, at having had the opportunity to work for two friends early on and watching from the inside how their companies raised $4m in 10 months, and the smaller of the two, $2m over 24 months…..all just starting from a “really big story” as Drury puts it.

  • Sounds like you need to hire a virtual assistant, Andrew.

  • marco iacobellis

    same for me.
    can't understand everything without a written transcription (even a bad, automated, one)…

  • dg

    Private software companies usually sell for 3-4x revenues, while the stock of public companies can trade at 10x revenues. Big public companies can acquire $1M of revenue for by purchasing a small private company for $3M, then immediately have their market cap increased by $10M, effectively netting $7M.

  • netsp

    Cheers dg,

    I figured that was the “arbitrage” he was talking about. I assume there is more ot talk about then just that though.

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  • seesaynote

    great content!!!! i came to this forum by serendipity in its finest. Great job Andrew. I live in Atlanta and trying to connect with local tech events. If any body is aware of any, please drop a line. I am listening to every single interview. period

  • great content!!!! i came to this forum by serendipity in its finest. Great job Andrew. I live in Atlanta and trying to connect with local tech events. If any body is aware of any, please drop a line. I am listening to every single interview. period

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