Rod Drury is the founder and CEO of Xero, a cloud-based accounting platform that competes head on with Intuit’s QuickBooks.

Started in 2006, Xero now boasts 700,000 subscribers and a market capitalization of almost $3 billion. Xero was picked by Forbes as the World’s Most Innovative Growth Company in 2014 and 2015.

Drury got the capital to start Xero from selling another software company, AfterMail, for $15 million plus another $30 million in a potential earn-out—not bad for a company with a little more than $2 million in revenue.

Drury offers all kinds of insight in this interview including:

 

• How to avoid the mistake he made in structuring his earn-out, which ended up costing him $30 million.
• The definition of R&D by acquisition.
• How to use public company arbitrage to increase the value of your company.
• How to transition from offering a service to a product.
• How to get an acquirer to come to you.
• How to exhibit at a trade show if your goal is to get acquired by someone in your industry.