Over the weekend, approximately 400 Men of Morehouse turned into Morehouse Men. The latter term is the lifetime distinction received on graduation day. This year’s commencement speech was unlike any other. Numerous media outlets covered the stunning story of billionaire investor and founder of Vista Equity Partners, Robert F. Smith’s announcement to absorb every 2019 Morehouse graduates’ student loans. The video and reaction still give me goosebumps. In this legendary story, the next question asked: “Who is Robert F. Smith?” The New York Times does a good job covering the basics.
Robert F. Smith is the founding partner of Vista Equity Partners (Vista). All of their portfolio companies combined total one of the largest software companies in the world employing over 55,000 employees. To provide context, Facebook employs close to 40,000 employees. Vista buys companies and puts them through their industry-coveted and respected playbook. Depending on the economics, they will sell them to other private equity companies or just kept them growing. Over $46 billion dollars has been invested to date.
Vista has had a serious impact on local entrepreneurs here in Atlanta, two companies in specific.
Back in 2008, Vista made an investment in legal software company Aderant. Vista and Aderant are private so financials are not disclosed, however it is safe to assume that Vista acquired more that 50% (that is their typical playbook when making an acquisition). At the time, Aderant Holdings had 535 customers. Fast forward to 2012, Madison Dearborn purchased the majority of Vista’s stake. Aderant had grown their customer base to 3200 clients or nearly 6x in customer growth. Two years later in 2014, Madison Dearborn purchased the remaining equity Vista had and a year later in 2015, Dearborn sold the entire company to Roper Technologies for $695mm. To summarize, Vista purchased the company in 2008, four years later sold their majority share after going from 535 customers to 3200. Madison Dearborn then tripled their money since purchasing the company when it was 3200 customers and they did it in three years. All headquartered out of Atlanta…or Alpharetta but we’ll claim Atlanta on this one.
Another amazing story involving Vista Equity Partners includes a well-known, successful software company called Gather Technologies which does event management for restaurants. Nick Miller and Alex Lassiter started Gather in 2013. Five years later, Gather raised $55m from Vista. Pretty remarkable from two entrepreneurs who pivoted their business three times beforehand, didn’t get down, and persevered to build a company with nearly 200 employees today. Here is the story of Gather on Vista’s website and a great interview by their CEO.
These are two, local examples of how Vista Equity Partners work. Back in 2000, Robert F. Smith founded Vista Equity Partners, nineteen years later the extremely successful business man stood up on stage this past weekend to relieve $40m of debt for some of the smartest and brightest students of our generation.