By Tina Irgang
Michael Praeger started his career working for a venture capital firm in Boston and went on to launch three software companies. On a Labor Day weekend trip in the late ‘90s, he fell in love with Charlotte, moved there and never left. Here, the CEO and co-founder of tech powerhouse AvidXchange talks about the twists and turns of his career, and why Charlotte is a great place to start a business.
Not a lot of people leave college saying, “What I really want is to automate payments.” What interested you about that space?
Praeger: I … worked with a venture capital partnership in Boston, Summit Partners. I worked on a team that invested in software companies and financial technology companies. So one of the things I was really interested in … was around how technology can impact business operations. And so after leaving Summit, I ran a software company in Boston, and what we did there was, we automated the tax billing and tax collection function. Kind of the two themes I’ve had in my career, also with the third software company I’ve run, is to think about how I can use technology to automate a key business process. …
With my company in Boston, we struggled with how to hire software developers, how competitive it was, and how do you find the right ones that would be a fit for you in terms of their skill sets and experience level? … So we had kind of web-based tools for companies on a subscription basis to hire the right skill set of workers and manage the visa process.
We sold that business in November of 1999, and then I started focusing on what I was doing next. So the business problem that I focused on was around how service-based companies, their back-office processes around procurement and contracts and invoices were very manual and paper-intensive. We actually started tackling the procurement side first, and so our first product we developed as a company is one we don’t have anymore, which was AvidBid, a bid management system. …
Then our customers said, now we’re trying to match all these paper invoices to electronic contracts, can you help us? We said, we’ll build you this module called AvidInvoice to help you manage your invoices and electronic attachments to these electronic contracts. About six months later, these customers said, “Guys, actually, the management system is great, but we only use it a few times a month … when we have a bidding event to do, but your invoice system we use every day, and it creates more value for us than the core management system.” So we said, let’s invest in that a little bit more. We were two years into our business and migrated everything. … So I didn’t really wake up thinking about accounts payable, but I was thinking about where there’s really a labor-intensive process that technology can impact.
Why was Charlotte a good place to start your company?
Praeger: My wife is also an entrepreneur, and we were traveling around the country attending various conferences. We’d run into people from Charlotte and they always seemed to be upbeat and really passionate about the city of Charlotte. We’d never been to Charlotte other than the airport. So Labor Day weekend of 1996, we said we’re just going to go for a weekend to check it out. We just fell in love with it. We didn’t know a single person. But one of the things we really liked about the city was, it has this can-do attitude and pro-business culture. The existing business leaders in the city are very open to supporting the entrepreneurial community and fostering growing businesses in the city — it’s a very supportive environment.
You’ve run a few different companies in your time. Do you have any other business ideas up your sleeve?
Praeger: All my thoughts about what’s next really relate to AvidXchange. Yes, I have run a couple of other companies, but none of them had the market opportunity that we have to change the whole dynamic around how businesses make payments. … If you look at kind of that core middle-market segment that we define as companies between $5 million and $1 billion in revenue, … it’s estimated that maybe 20 percent of those companies have done something already to automate, eliminating their paper invoices and their paper checks. The majority, 70 or 80 percent, are still processing paper checks. … We’re only scratching the surface in terms of the market opportunity.
Since your wife is also an entrepreneur, do you two compare notes or exchange leadership lessons?
Praeger: There’s certainly a lot of interaction that happens, just like sharing with each other what happened today, what problems am I trying to solve? But a lot of it, when there’s any kind of key decision that has to be made, to have any kind of close confidante, someone you can bounce a key idea off of and get input, somebody who knows your personality and how you do things … can be insightful in terms of validating — or invalidating — ideas or key decisions we’re thinking about. It certainly helps. The problem we have is that both our lives are crazy, and getting downtime where we’re not on both our laptops at midnight and can enjoy other things, that’s the challenge.
So given your busy schedule, how do you find balance?
Praeger: We live on Lake Norman, so we spend time on the lake, and that’s one of the key times when we kind of decompress. The other thing is … our son plays competitive basketball, so I started a competitive basketball program here in Charlotte that I’m involved in. We also started The AvidXchange Foundation, and the whole mission is to help foster the development of kids. That [involves] supporting causes related to underprivileged, economically challenged kids, all the way to sponsoring youth robotics programs and helping them think about engineering and doing a robotics team. … So part of decompressing is getting your mind out of the day-to-day, whether it’s by being on the lake or getting immersed in another cause.
About Human Element:
Human Element is a regular, web-exclusive column that aims to get to know the leaders behind great companies. Rather than talking about business models and growth strategies, CEOs open up about what motivates and guides them in their professional and personal lives. To be considered for The Human Element, email firstname.lastname@example.org.