Buying and Selling Online Schools: The Unusual Career of Michael Clifford (Part 3)

SM: When you were building Bridgepoint, what was the investment thesis you followed?

MC: I was involved in the company for the first six years, and the remainder of the time I was just a shareholder. I introduced the guys I recruited at Warburg Pincus, where there was a CEO named Andrew Clark who wanted to financially back us. Everyone got together and thought that TeleUniversity was the right platform, but Andrew had the vision for Bridgepoint. Andrew, in my opinion, is one of the top five CEOs in education.

SM: You basically got the dots connected and spurred on the process.

MC: I view myself as a catalyst with Bridgepoint. I started it 12 years ago, and even though I did not have it right at least I had it started. I can’t quote the exact numbers, but I think they have $20 million invested and have created $800 million in value. That is remarkable.

SM: After Andrew came to take on Bridegpoint, what was your next move?

MC: In 2002–2003 I was looking for schools to buy. There are only 3,000 regionally accredited schools in America. When I would hear that one was in trouble I would try to buy it. I found one that was ready to be bought, so I went to a private equity firm; they kind of threw me a fee and took it away from me. They never got it done properly and failed. Bad karma, I guess.

I then heard about Grand Canyon University in November of 2003. A friend of mine called me and said, “My four children went to GCU and they are going to go out of business, can you help the school?” He knew that I did charitable fundraising and was hoping for help that way. I told my friend that I was not going to fundraise, but that I was going to buy the school.

I signed up the school in November of 2003. I went out to raise money and find a manager. I had my choice between Brian Mueller and Brent Richardson. Both of them wanted to leave what they were doing and run Grand Canyon. I made a decision that Brent Richardson would be the right CEO for the school for the shape it was in because it was a really dirty turnaround. It was a nasty cleanup job.

SM: Did you view Brent as a turnaround specialist?

MC: Brent is a scrappy entrepreneur. He had done 16 startups in his career. He was used to it. Brian was used to running multi-billion dollar businesses. He was actually very angry with me what I told him I was going to go a different direction and let Brent run it. However, I told him once we had it cleaned up I would knock on his door again and see if he was willing.

My prophecy came to pass. Brent became CEO and did a great job; he deserves all the credit. I commuted from San Diego for two years. I would leave home Monday morning and come back Friday. I had an office next to Brent.

SM: What did you do if you don’t get involved in the operational parts of the university?

MC: I acted as Brent’s wingman. I sat in the office next to him and helped solve whatever problems I could. I recruited 200 employees from the University of Phoenix. I recruited Ken Blanchard, a friend, to give the business school a brand name. I did whatever I could to help Brent be successful. Brent did the day-to-day turnaround.

When I first started the Grand Canyon process, I met a management team in Austin, Texas that had been extremely successful in the cable industry. They bought a cable company for $300 million and sold it for $4 billion in 10 years. They were very young and successful. They were some of the first investors in Grand Canyon because they wanted to learn education. They were on the board of directors and came out on a regular basis.

After two years of commuting, the company was stabilized and there was nothing for me to do. I went back to San Diego. This was the end of 2005 and I was bored. The management team from Austin had learned the business and were ready to go buy a school. They asked what I thought and wanted to do. I told them I was interested in a nationally accredited school versus a regionally accredited one. I also wanted to do something that targeted the health care industry.

This segment is part 3 in the series : Buying and Selling Online Schools: The Unusual Career of Michael Clifford
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