How To Beat Wall Street And Silicon Valley Simultaneously

The American Dream is alive and well on Wall Street thanks to Robert Smith, the richest black person in America, who has figured out a way to re-engineer both private equity and enterprise software— and used this secret playbook to build a $4.4 billion fortune.

- Nathan Vardi

It’s a Saturday afternoon, at the height of vacation season, in one of South Beach’s hottest hotels, and Robert Smith, the founder of Vista Equity Partners, is dressed like exactly no one within a 100-mile radius of Miami: In a three-piece suit. His signature outfit—today, it’s gray plaid, accented by an indigo tie and a pink paisley pocket square— apparently doesn’t take a day off, and Smith isn’t taking one now either. He’s gathered dozens of CEOs from his portfolio companies, software firms all, for a semi-annual weekend offsite to drill them in the ways he expects his companies to operate.

It’s not just the suit that’s unusual. Private equity firms almost never treat their portfolio companies, transactional chits by design, like an organic cohort. And until recently, PE, a field built on borrowing against cash-generating assets, wouldn’t touch software firms, which offer little that’s tangible to collateralise. Yet Smith has invested only in software over Vista’s 18-year history, as evidenced by the CEOs, like Andre Durand of the security-software maker Ping Identity and Hardeep Gulati of the education-management software company PowerSchool, who have been summoned to Miami Beach, waiting to swap insights about artificial intelligence and other pressing topics. And Smith deploys more than 100 full-time consultants to improve his companies.

“Nobody ever taught these guys the blocking and tackling of running a software company,” says Smith, as he takes a lunch break at South Beach’s 1 Hotel to nibble on a plant-based burger. “And we do it better than any other institution on the planet.”