Andy Reeher
President
Reeher LLC
Saving money while raising money is something campuses can actually do. Andy Reeher parlayed this knowledge into a start-up that serves a growing number of blue chip U.S. campuses.
When and how did you start your company?
In 2002 I had an insider's knowledge of how much money campuses spend raising money. I believed I could help them improve their efficiency and their results. So I founded a consultancy as a Minnesota LLC. By the end of year one I had three clients. In year two, employing myself and an analyst, we increased one client's new donors by 10 percent, while reducing client expenses by forty percent. We also discovered that it was not uncommon for individual gift officers to cost more than they raised.
Who are your customers, and what do they expect of you?
Johns Hopkins, Carnegie Mellon, Duke, Tulane and Drexel are some of them. They want our software and other tools to help them raise more money, enable each officer to be more productive, forecast future fundraising performance, reward their stars and assist their under-performers.
Explain how 97 percent of college donor relationships are losing propositions for the college.
Universities spend a lot of money on alumni, friends and parents. However, under analysis, just three percent of the recipients of a university's attention donate enough to cover those costs. Per-alum a university may be spending $150 to $350 each year. Again, fewer than 3 percent of them are donating as much.
How is your business doing today?
In 2008 we launched an enterprise software solution of our own invention, and switched from a consultancy to a servicing platform. Initial software development was financed internally. We've since received 'angel' money and an initial round of private equity. We expect 2010 to be our first break-even year, somewhat ahead of our business plan.
How and where did you acquire outside capital?
Our first round of 'angel' financiers were successful businesspeople who themselves were major university donors and prospects. They easily understood the benefits of increased efficiency that my business could provide. We moved to financing round two when Cincinnati-based HillStreet Capital Inc. approached me in September 2008. I'm particularly pleased they did, because they provided the help we need, and I am able to retain majority ownership.
You left a company that was facing obsolescence of its primary product. Is a 'burning platform' a good launch pad for an entrepreneur?
Deluxe Check Printers was my first employer out of college. Everyone there expected printed checks to be a dying business. So for our strategic planning we became big users of data in search of operational excellence. In that environment I grew business skills that don't exist in many other places. By 2001 at age 39 it was time for me to leave. Instead of another career job, I was looking for a day job that would help me launch a personal business.
Did your college education help you become a successful entrepreneur?
Yes. My undergraduate major was history. History students must learn to read, write and think critically. Later, in graduate school at the University of Chicago, I was taught that entrepreneurs systematically underestimate risk. Critical thought and focusing on the evidence are the antidote to common entrepreneurial failures. I'm grateful that I haven't had to experience such failures, thanks to my college education.
What else did you obtain at college that helps you in your work today?
In school I learned a set of analytical frameworks which I use often to analyze business opportunities.
Are there universities with 'burning platforms?'
All campuses are under pressure, and the last eighteen months have been turbulent. The service they render is of greater value than ever. But their delivery method may need to change.
Where would you like to be five years from now?
Reeher LLC will be THE information utility for university fundraisers.