How Screwed Is Vista Equity Partners
Title says it all. First - if you don't subscribe to Axios Pro Rate. I highly encourage you to.
Second, sources for additional reading: axios .com/robert-smith-vista-equity-tax-fraud-8dc5b325-73ef-4041-9c37-e9d5cde1e4cb.html
bloomberg .com/news/articles/2020-10-15/vista-s-smith-tells-executives-co-founder-sheth-may-leave-firm
One of Smith's biggest internal challenges is a perception that he long underplayed the severity of the investigation — presenting it as a relatively minor accounting problem. Or not raising it at all with certain limited partners, save perhaps for a minor data room mention.
Sheth, who co-founded Vista with Smith, wasn’t invited to Wednesday’s call, according to one of the people. There are no active, formal discussions regarding his departure, the person said.
Vista on Wednesday removed Sheth as a director of a company it owns, Datto Holding Corp., according to an amended initial public offering filing.
Brockman was on Thursday charged with 39 counts, including tax evasion, money laundering and evidence tampering, in what prosecutors called the largest U.S. tax case ever against an individual
Personally, I think the firm is institutionalized and far enough distanced from him that it will hurt in the short run as negative publicity, but will be fine in the long run. However, if they lose MDs and seasoned portfolio company executives graduate out of the system and change institutions for their next stint it could be devastating. Sheth for example is an incredible deal maker and has been as instrumental as Robert in building the firm.
Very interesting. Thanks for sharing.
Really disappointing. He was one of my favorite investors of all time but there's no excuse for his behavior. It's not even close to just being a little accident...it's outright criminal. :\
Also he reported his mentor that funded him initially lol
It is incredibly disappointing. He went turncoat on the guy who gave his career life while gaining immunity from his actions, which are considered legally criminal today, regardless of moral leaning.
What he built at Vista is incredible but it is a massive tell that his best friend, Sheth, is no longer associated with him professionally or personally.
Mansions, jets, and shit is cool. But, it is slightly less cool when all your friends and colleagues will take a while, if ever, to warm up to you again.
They really don’t want minorities to succeed do they (Sheth and Smith)
On the other hand, if he goes out and kills another fund in the top 5%, all will be forgiven and his name will return to glory within the financial circles.
Pretty sure being a minority had nothing to do with the fact that he participated in the largest tax evasion in our nation's history? If he was white ya'll would complain about how his privilege got him out of jail.
proof that it's simply money that can get you out of jail.
Dude,
There was a thread detailing horror stories about Vista’s workplace culture being toxic. Thought it was exaggerated but based on this recent news It seems much more believable since culture flows from the top down. Almost had an offer to join vista as an analyst but seems like I dodged a bullet anyways
"Almost had an offer"
Ok.....
Jk, but yes you probably dodged a bullet.
lol unless you got a KKR or BX PE analyst position no way you ended up in a better position. Just sayin
Thanks for "just sayin." I'm an analyst at BX PE. Cool?
It was a joke buddy. Take it easy. Also, if you have somehow managed to frame in your head that KKR and BX PE analyst positions are "better" than any other position (how does one even conceive of one being "better" than another?) than I think there are some serious underlying and unhealthy issues with your view of the people around you in this world...
Buddy clearly has a small penis and uses prestige in order to compensate
Regarding Smith's "Statement of Facts" (link in the Axios article), anyone know why the IRS would have denied his application into the ODVP program?
They already knew about them.
In some of the other articles, the FT published a really good one Saturday morning, it mentions how he applied when the Swiss bank he was using told their clients they were applying to a leniency program and would be disclosing their clients accounts to the US government. Smith subsequently applied himself, but was rejected because the IRS already knew about his accounts.
The next logical question is then why did it take 6 more years?... others on this forum can probably attest better to this from personal experiences (assume there is a lawyer somewhere) ... but my uncle was a white collar defense attorney for about 15 years and worked on a lot of similar cases. From him, when the Federal government finally decides to go after you they already have it all laid out. They won’t hesitate to take 10 years to build a case. They like to win.
TL;DR if you are indicted on criminal charges by the Feds you are toast. Smith got off largely because he helped them get Brockman
Makes sense - very helpful. Also, I'd imagine all of his public charitable giving the past few years was done (at least in part) to build up significant goodwill reserves for the day this news emerged. Btw just read the DOJ indictment filing on Brockman, which was interesting. Boggles my mind that someone would go through all that and risk jailtime on $2B of capital gains (which if I'm not mistaken, would only be taxed at the 15%). $2B with the risk of the IRS busting down my door vs. $1.7B while sleeping soundly at night is a no brainer to me. But then again, that's probably why I'm not a billionaire...
Vista will be fine and remain one of the top performing MFs. LPs care about $, this story will blow over in a week unfortunately
Kind of a ridiculous headline. From the articles it looks like there was no impact to LPs and Sheth was already planning to leave (the guy is a billionaire and has been under Robert for decades, dont blame him). I'd be surprised it this slows them down, they are the top tech investor in a market that is in love with tech companies
Nobody will care
he’s an amazing investor
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