[REPLAY] Private Equity Masters 3: Robert F. Smith – Vista Equity Partners (Capital Allocators, EP.202)

Robert F. Smith is the Founder, Chairman and CEO, Vista Equity Partners. Vista is a private investment firm that focuses entirely on enterprise software companies and manages $75 billion in assets across private equity, permanent capital, credit and public vehicles. Taken together, Vista's current portfolio companies are about 70 in number and house 70,000 employees, 700,000 customers across 175 countries, and 200 million global users. Its combined revenue would make the portfolio one of the largest enterprise software companies in the world. Our conversation covers Robert's background, the special characteristics of enterprise software, screening potential targets, adding value through industry expertise, assessing management teams, employing operational and financial leverage, and exiting investments. We then turn to managing Vista and the competitive landscape, and close with reflections on Robert's past mistakes and impact through philanthropy. Learn More Follow Ted on Twitter at @tseides https://twitter.com/tseides?lang=en or LinkedIn https://www.linkedin.com/in/tedseides/ Subscribe to the mailing list https://capitalallocators.com/ Access Transcript with Premium Membership https://capitalallocators.com/signup Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com https://thepodcastconsultant.com/)

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Ted Seides?

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• 0:46Ted Seides?

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• 1:24Ted Seides?

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• 2:06Ted Seides?

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• 2:47Ted Seides?

  the operations partner trusted by the leading private market GPs. One theme that keeps coming up on the show is GPs that build the strongest and most durable relationships with LPs are the ones that have both strong returns and strong operations. AI raises the stakes on operations and having Juniper Square as your operations partner helps ensure your data is organized, accurate, and accessible, so you can unlock operational alpha. That's why thousands of GPs trust Juniper Square. Learn more at junipersquare.com/capitalallocators.

• 3:32Ted Seides?

  Hello, I'm Ted Seides and this is Capital Allocators. This show is an open exploration of the people and process behind capital allocation. Through conversations with leaders in the money game, we learn how these holders of the keys to the kingdom allocate their time and their capital. You can keep up to date by visiting capitalallocators.com.

• 3:59Ted Seides?

  Over the last decade or two, no asset class has generated as much interest and investment dollar returns as private equity. This eight-part mini-series, Private Equity Masters, is a set of conversations with some of the longtime leaders in the space. We'll hear their stories, those of their firms, and their perspectives on this all-important area of the capital markets. My guest on the third episode of Private Equity Masters is Robert F. Smith, the founder, chairman and CEO of Vista Equity Partners. Vista is a private investment firm that focuses entirely on enterprise software companies

• 4:40Ted Seides?

  and manages $75 billion in assets across private equity, permanent capital, credit, and public vehicles. Taken together, Vista's current portfolio companies are about 70 in number and house 70,000 employees, 700,000 customers across 175 countries, and 200 million global users. Its combined revenue would make the portfolio one of the largest enterprise software companies in the world. Our conversation covers Robert's background, the special characteristics of enterprise software, screening potential targets, adding value through industry expertise, assessing

• 5:20Ted Seides?

  management teams, employing operational and financial leverage, and exiting investments. We then turn to managing Vista and the competitive landscape and close with reflections on Robert's past mistakes and impact through philanthropy. Please enjoy my conversation with Robert F. Smith. Robert, thanks so much for joining me.

• 5:42Speaker 01

  Pleasure to be here. Thanks for inviting me, Ted. Good to see you.

• 5:45Ted Seides?

  Why don't we start with, I'd love to just have you go back into your background and what got you from wherever you were to forming Vista, what, 20 years ago now?

• 5:56Speaker 01

  I started my career as an engineer, a chemical engineer. And it was neat in that time being a chemical engineer because we were actually now moving beyond what I'll call trying to invent new unit operations, but actually putting in control systems of these unit operations. So what that really meant was implementing computing power into the environment of process engineering. And one of the greatest, call it discoveries, that you find when you do that is how much waste is eliminated when you actually put computing power against those sort of things. So as I started to realize that while inventing things was a great way of life, I learned that capital and utilization of capital can actually be much more effective. And I went off to build.

• 6:40Speaker 01

  Business School, went and joined Goldman Sachs in the mergers and acquisitions department, then was asked to move out to San Francisco to help start our tech group. So it was our first M and A bank around the ground focused on technology back in nineteen ninety seven or so. Well, in that process, really started to evaluate, see how software companies were run. And in that dynamic, started to see that same sort of inefficiency, shall we say, in how software companies were run. Well, it was a new industry and because it was a new industry, there were very few, call it, operating procedures that were, how do you run a software company? So I had the good fortune in that regard to actually evaluate hundreds and numbers of software companies. And one in particular I saw had some standard operating procedures

• 7:22Speaker 01

  that were used to actually make software companies efficient and then took those and really adopted them into a methodology of driving it across a number of software companies, not just one, kind of the McDonald's model. So one great, great restaurant, but how do you do it in a franchise sort of way? And in essence, that's how Vista was born. So what we look to really do at the end of the day is innovate and create value creation mechanisms that can scale and that we can actually have economies of scale and scope across the portfolio companies we have the opportunity to partner with.

• 7:56Ted Seides?

  What was that entrepreneurial moment for you? So you're at Goldman Sachs, you're looking at all these different businesses in this area you know. What was the trigger to say, you know what, I think I need to do this on my own?

• 8:07Speaker 01

  So I started to understand what investors, private equity investors were doing out in the marketplace because I was actually pitching companies and selling companies to them. And I realized that none of them, like any in that period of time, none of them were really thinking about software as an area of investment. Some may have had one or two software investments, but they were thinking about technology broadly. And at that time, there's a lot of focus on semiconductors and services business and those sorts of things. And I realized that there was just frankly, a lack of awareness of the impact of software. Because when you, as an engineer, having gone through that experience, I could actually see the actual ROI of the products that software companies sold. When you actually, for instance, implement.

• 8:50Speaker 01

  A payroll system in a large company. You eliminate massive numbers of waste in the system or inefficiencies in the system. That actually can then be repurposed in other parts of the organization to help the company grow or become more profitable. So when you start to realize that not very many folks at that time in the private equity industry were actually focused on that space. I said, this is one that you could actually create a sustainable competitive advantage for something we all learned in business school. By approaching one market, becoming an expert in that market and actually bringing a unique set of tools to that market to maintain that competitive advantage. Hopefully for decades for as long as I'm going to work, but that's really what gave me the spark of inspiration.

• 9:30Ted Seides?

  And so what were the things back then that you knew or felt you knew about these software companies? That would allow them to fit into this sort of box of private equity or leveraged buyouts?

• 9:41Speaker 01

  Yeah, so there's a couple inherent advantages of enterprise software that are now just being realized. And I think that's why you see the rerating of these software companies and the valuations at the levels that they are, and they continue to expand. One of which is if you really think about it, it's a business, it's a 95% gross margin business at the end of the day. Okay, how many industries are 95% gross margin? You build it once, you can sell it as many times as you can. There's no inventory, so as a result, you never use it up. There is negative working capital associated with the business. And when you think about how the mature industries at the time were consolidating. It still is a winner take most type of a market.

• 10:23Speaker 01

  I chuckle Ted every now and then I have the opportunity to work with people and investors and companies all around the world. And sometimes I'll walk into an environment and haven't met these people and I'll say, okay, how many people here? And I'll use a certain spreadsheet software and everybody raises their hand. And I said, why is it I can walk in anywhere in the world and say the name of that spreadsheet and everybody uses the same thing? Well, that's the consolidating dynamic that occurs. Now, when I started, there were five or six different spreadsheet companies. But ultimately there was one winner and that one winner on the one hand patch product superiority as well as execution excellence. The way that they delivered it to their customer set. Everybody converged in the entire industry on that product. Well, that's a dynamic that actually exists in enterprise software broadly.

• 11:08Speaker 01

  Now, often what you have to do is figure out the taxonomy of the industry as to who's going to be consolidated, who's going to be the consolidator. But ultimately, if you actually provide high ROI benefits, which is the key to it all, you're creating massive amounts of productivity for your customers. Then you have the ability to actually be in that industry, not for quarters or for years, but for decades. And we do a survey every year, just to give you a point of example, across all of our portfolio companies. And today, the average ROI, return on investment of the products that we sell to our customers. So this is the customer's benefit is over 600%. So there's just very few innovations or products or activities that give you that sort of ROI,

• 11:52Speaker 01

  but software does it fairly consistently. And so you have the ability to deliver that. And then if you continue to innovate off of that, you can continue to drive continued adoption of those products into your customer set and provide benefit for them.

• 12:04Ted Seides?

  So take me back. Theoretically, you've stumbled upon a great industry with great dynamics and you understand how it works. Is there a story of one of those early deals that you can still hold up today and say, aha, we were right?

• 12:19Speaker 01

  One of the things that I think we did very well early on, still do well, is focus on product development. And what I mean by that, often enterprise software companies, they were started by a person who was really good at developing some product to solve some problem. And in some cases, that person wasn't necessarily professionally trained to be a product development manager, but actually was a good product developer. And so one of the things we do is actually bring some system and structure associated with it. And the aha moment is, it isn't that every single product developer is the best at actually doing product management. And so putting professionalized product management across portfolio companies

• 13:02Speaker 01

  and within those portfolio companies yields massive benefits. And you have to, often in those dynamics, engage very clearly. With that management team and saying, hey, here's why this matters because when we're going to move from a small to medium business to an enterprise, we need to have the ability to scale our product with fewer deficiencies. And frankly, at the end of the day, fewer bugs. So that it has higher reliability, which you can then drive across an enterprise. So I wouldn't say there's just one instance, but we have hundreds of instances now. We've done this now over 500 times. And each time it's proven out that product superiority is probably one of the most important things that you can focus on, which is a very much a heart of our best practices methodologies.

• 13:45Ted Seides?

  So along those 500 transactions over the years, what do you look for in your due diligence that leads you to think this is one of those enterprise software companies that you want to own for your portfolios?

• 13:56Speaker 01

  Again, the most important thing is really, does this provide a real sustainable value to the customers that they're serving? You got to look at the must have versus nice to have kind of rubric of decision making from the customer's perspective. So that's kind of point one. Point two, does the management team really understand not only the value that they are creating for their customers, but how their customers are actually using that product and how in using that product, it actually enhances their relationship with their customers. So that's kind of point number two. Then we look at some of the other elements. Is it a recurring revenue business? Does it have high retention rates with its customers?

• 14:36Speaker 01

  Why does it have higher retention rates with its customers? Is there an opportunity to upsell existing products to that customer base? And then you have to look at the management team. Does this management team have the capacity to scale and grow? Or do they need a different set of training or tools or experiences or relationships to enable them to grow those businesses? And probably 70, 80% of the companies that we buy is led by someone that this is the largest company either they've been in or the largest company they've ever led that day. And so often they're moving off into a sphere that they have no experience and they're looking for some construct, for some help. And I think that's one of the things that we provide as Vista. We provide an infrastructure and an ecosystem to support all of the C suite.

• 15:20Speaker 01

  Executives as well as rank and file to help not only achieve their financial objectives, but also frankly, their developmental goals of their people and their infrastructure. And I think that holistic approach is one of the key differentiators for us in the marketplace. That when we take it into a due diligence session, the prospects see that and 98 times out of 100, they'll say, we want to do business with you because we see how you enhance the value of not only our business from a financial perspective, but create a business that actually is much more durable and what's more reliable to our customer base and actually has the potential to frankly, be around for decades after we get through working with the management team on some of these enhancements.

• 15:59Ted Seides?

  When you've gone that deep in a vertical like you have here, how do you think about institutionalizing what you know so that you can deliver those benefits to the next portfolio company that enters your portfolio?

• 16:11Speaker 01

  That's a key part of who we are in our organizational design. I think you know this, we've got over 150 or so investors and we spend a tremendous amount of time training our junior people, our mid-level people for the areas that we know are important for them to be senior folks to execute across each of our platforms. And we've had the great fortune, quite frankly, of being able to create new and different products because we've been able to train some of these just fantastically talented young people and then give them an opportunity to increase their leadership potential in that regard. The other part of the equation, quite frankly, is Vista Consulting Group. If you think about it, we've got almost as many people in Vista Consulting Group as we have in our investment team.

• 16:55Speaker 01

  And what they really do, the way I like to think about it is VCG engages with our management teams, our investment professionals, our operating professionals to really deliver and enhance, call it the value creation best practices. And so we will buy a new company, we'll engage with a management team and they may have, look, we'll go and we'll deliver a plethora of here's some best practices to be more efficient in your product development and go to market strategy and customer service or managing the way your go-to-market motion might be and outside of a geography that you're currently in. But you will often from them learn things that they're doing that are particularly effective in the markets that they're in that have some applicability across the broader portfolio. So the way I like to think about it as an engineer is

• 17:40Speaker 01

  We have very effective feedback and feed forward loops and we actually have structured times when our senior management teams get together, they learn from each other, they have shared experiences, we'll take the data from that, we'll enrich that data within VCG and then redeliver it across portfolio companies that may need that sort of applicability. So the organizational design, the construct, the methods by which we engage with our management companies and our management teams, quite unique in the industry and I think has that effect of constantly being able to evolve not only our best practices, but evolve relative to the way that the technology industries continue to evolve using different tools and methodologies and platforms. So I think it's quite a unique structure in the industry

• 18:25Speaker 01

  that has been quite effective over the last 20-plus years.

• 18:27Ted Seides?

  At what point in time over that trajectory of the last two decades, did you go from having a series of individual companies to having this centralized VCG and the ability to institutionally share this across your portfolio companies?

• 18:42Speaker 01

  It has been that way from the beginning, from the first three, four, five portfolio companies that we invested in, we would bring those CEOs together and we'd have shared experiences around, okay, well, how did you actually manage your product development or your services and you've got 10,000 customers, this was a time when everything was on-premise, and you've got 10,000 customers, you need to send updates, how did you do that effectively? And how did you, when you send those updates out, not get deluged on Monday with thousands of calls because it wasn't installed properly? And those are some of the problems of the past that we've solved in the way we do things today and going forward, to the time in which we actually started to really migrate businesses from on-prem to the cloud. And so I think

• 19:25Speaker 01

  we've done more of those migrations than probably any institution on the planet today. And those are the sort of shared best practices, when you do it once, we take it back and we find it, okay, what went well, how should we refine this, what are the methodologies that we should do a little more work on? And then the next time we do it, we do it a little differently or a little better, a little faster. And/or implementing, you know, our quote-to-cash systems. In some cases, the early days, it would take six to nine Nine months to get those implemented and today, in some cases, we're able to implement five or six of them in a couple of months across portfolio companies. So that feedback, feed forward capacity with the organizational design has always been something that we've held as a hallmark of who we are and what we do. And then as you get better at it and you

• 20:08Speaker 01

  build more people capacity, you can actually do more and more faster and faster and then kind of enhance what you can actually deliver to your portfolio companies. So it's been a design point all along. It's just a question of how effective we've been in scaling it, which is really always the challenge.

• 20:24Ted Seides?

  How do you think about assessing either the CEO or the management teams of your portfolio companies as they're going along in this process?

• 20:32Speaker 01

  Again, it's ongoing. So our operating MDs, our investment principals, as well as our VCG subject matter experts, that's what they talk about and say, okay, we need to go implement this particular best practice in the company. And then you say, is this manager that's currently there capable of doing it? Well, if you've done this a few hundred times, you have some references, you have some benchmarks to see if they're able to do it or able to learn to do it, or do you need to bring in or augment their managerial capacity to get that done? And a lot of it is feel on the one hand. Sure, we've got assessment tools that we're kind of known for, but a lot of it really has to come through the discussion with its senior executives and saying, here's what you now have to do. For instance, you need to migrate

• 21:14Speaker 01

  a product into AWS or Azure or something of that sort, or a platform. And you just have to look at your team and say, okay, we've done this, I don't know, 75 times. Is this 76 time do we have the right people, tools, capabilities in order to do that effectively? And if not, what are we lacking? Is it skills? Is it number of people that we need? Is it organizational capacity and design? And then that's what our VCG organization will come up with and then work with the operating MDs and investment principals and say, okay, here's a change we need to make in order to make that happen. Get the buy-in with the management team and move forward. It's a highly iterative process and engaged process with our team, with the management team of the companies.

• 21:53Ted Seides?

  You mentioned assessment tools that you're known for. What are some of those tools?

• 21:57Speaker 01

  Sure, we have some which are aptitude, personality, profile, and those elements give us a sense as to is that individual in the right seat for the task that's ahead of them. And so you can have somebody who is a brilliant person, but actually working in the wrong role for that organization, or has the wrong sort of touch to be in customer service, the wrong sort of touch to be in sales. And so the way I like to think about it is more lock and key approach. So it isn't just that, oh, yeah, it's smart people do certain things, certain ways. It's really certain people are very effective in certain types of jobs. And so you really want to try to find the right sort of people to fit in the right jobs. And sometimes you have to move them around and sometimes you have to augment and support.

• 22:41Speaker 01

  And sometimes they're just because of where they are in their life or something, they're not a good fit for the job that they're in. And often we'll go in and partner with a company. Sometimes they do an exceptional job of their talent management. And sometimes they're hiring based on who's available at the time, who knows whom, et cetera, versus actually knowing what's the right sort of characteristics that you need for a person in that job. So I think we've become very effective at that and kind of finding the right characteristics for the right role in that company at that period of time. And sometimes the company is outgrowing the people that were in that role. They may have been great when they were selling to the small to medium businesses. And now they need to move to a larger enterprise class sale and they may not have the right skills.

• 23:24Speaker 01

  Well, we built training systems, which I think we're also quite known for is our training systems and capacity across all kind of the strata of an organization. But in some cases, they may not be able to make that leap. And so then you have to augment the management team with people who have that experience or come from another portfolio company who's done it before.

• 23:42Ted Seides?

  I'm curious what the dynamic is between your investment team and the operating executives of companies you buy, right? They're coming into an ecosystem where you've done this over and over and over again. And whether it's software implementation, hiring practices, all these things you're talking about, what does that dynamic look like between you and them?

• 24:01Speaker 01

  Yeah, I'll tell you what works well for us is now that we've been doing this for what 21 years or so, we've got literally hundreds, I think it's 400, over 400 executives who've been on their second, third, fourth, fifth, sixth tour of duty at a Vista company. One of the best things we do is now bring those new executives in contact with existing executives and say, okay, let's talk about how we're going to implement whatever the best practice might be. And here 15 people who've done that over the last two and a half years. Why don't you spend some time with them and talk about what worked well, what didn't? What did they wish they knew going into it that they can tell you now?

• 24:45Speaker 01

  And when you have that socialization experience from software executives, and it's kind of interesting, like all things of you're in a software company, how often do you talk to another software company about their challenges? You're kind of focused on your own world, your own challenges, and you're trying to glean whatever insights come to your podcast to hear words of wisdoms. You take those nuggets and you say, okay, how do I take that nugget and actually create something? Well, we have the unique advantage of having, in many cases, like today, 71 ecosystems, 71 separate software companies, but we bring the C suites together. We bring the middle managers together in certain best practice solution summits and those sort of things, and they share those best practices.

• 25:29Speaker 01

  And I'll tell you, that is probably the greatest tool that we have that decreases any resistance to change or to improve. And now what's happened in the marketplace is we get inbound calls from companies and executives who say, I want to be part of your ecosystem because I saw what you did with these five companies and we're similar. I want that. How do I get into that? And so that leads to a really interesting deal dynamic for us, which is we get a number of deals that no one ever sees because executives will come to us and say, hey, I saw what you did with Jamf and Ping and et cetera, and just spectacular performance and what those, so help me learn how to do that. And then we bring them into the ecosystem and say, okay, call these.

• 26:11Speaker 01

  Five senior executives and have your chief marketing officer call these 15 and then we bring them together. And pandemic has actually been interesting. Used to do a lot of it in person physically. Now we can actually do a lot more of it virtually, right? It's kind of interesting. So there's a higher frequency of engagement that can now occur in that context. But the content and the quality, because we built out all this content for so many years, has been quite effective in that regard.

• 26:37Ted Seides?

  How do you internally organize the delivery of that sources of information?

• 26:43Speaker 01

  The way to think about it, we've got, this is the unique piece, you know, investment team and then our value creation team. Our value creation team has operating MDs and Vista Consulting Group working in concert. And every portfolio company has some operating MD assigned to it. And some set or collection of VCG Vista Consulting Group resources that are assigned to whatever value creation dynamic that we've agreed upon with the management is going to be accomplished over some period of time. And so then there's an engagement plan, an engagement model. And again, we're not there to do it for the management team. We're there to educate, inform and bring forward what I call the resources to enhance their ability to accomplish the goals that we've underwritten to.

• 27:29Speaker 01

  And it's literally, in some cases, our value creation team is talking to senior management team people every day for periods of time until we call it broken the back of whatever challenge it is that we might have. And then the frequency goes down and it'll go to once a week, once a month, once a quarter, whatever it might be, depending upon where they are in implementing some of these best practices. So and depending upon how heavy the lift is. So every engagement model is different. It's bespoke, based on not only what we're underwriting to and agreed to with management. What are we going to do? How are we going to do it? And then over what period of time and then who's responsible at the company? Who's responsible at VCG? Who's responsible within the operating MDs to make sure this all occurs?

• 28:10Speaker 01

  There's some things you have to put in place like everything else before, something else that you can do, the building blocks. And so that's why we put that whole flighting together and work with the management team to make all that happen.

• 28:20Ted Seides?

  I want to turn a little bit over to the right side of the balance sheet, which is in these businesses with that type of gross margin. How do you think about the appropriate amount of leverage?

• 28:28Speaker 01

  It's been interesting. We've been able to do some real interesting pioneering work in the capital markets, which we can get to in a little bit, for people to recognize what these businesses actually can do. If you think about creating true operating leverage, not financial leverage, operating leverage, you then have the ability to dial up and dial down what we'll call your go-to-market resources and manage that relative to what sort of profitability you think you want or can capture in the company. For instance, we just sold one of our businesses. It was quite interesting. Going into the pandemic, that company was growing 30-plus percent, and quite frankly, it had some interesting profit margin there. We were kind of at zero,

• 29:10Speaker 01

  et cetera, because we were really growing this business. Well, the pandemic hit and we said, okay, let's do this. Let's throttle back just to make sure that if you have any losses, you don't end up with capital losses or lose any money in that business. And we did that for a quarter. Then all of a sudden, we saw a massive demand for that product again, which gave us the ability to put more resources and go to market, not drive the company at 30-plus percent growth and maintain the operating margins. But if we hadn't put the infrastructure in place before, we wouldn't have had the ability to throttle our business in that way. And I'm proud to sit here and during the pandemic, we had 68 portfolio companies. We didn't have to provide $1 of rescue financing. And that's because our investment teams, our

• 29:54Speaker 01

  operating MDs got engaged with every management company and said, okay, how bad can this be? Well, we don't know. So let's make adjustments and plans now to ensure that every company not only survives, it has the ability to thrive coming out of it. So that's one advantage of having these high free cash flow businesses that don't have a lot of CapEx burn on them. And if you build a solid operating infrastructure, you have the ability to throttle up and throttle down various elements of the business, but you have to know how to do it and do it responsibly. So this is an example of during the early stages of the pandemic, our teams were engaged with the management teams every single day, every single day, first two, three, four weeks of this, then they went to every other day. And then once we figured out, okay, here's the model.

• 30:38Speaker 01

  That we're going to operate until something changes. In some cases, all the customers stopped transacting. They still paid their software bills, but they stopped transacting in their core business. And in those cases, okay, how bad can this be in for how long? None of us knew in April and May and June, but by September and October, we started to see what the patterns look like. And now we're seeing one of our businesses 98% snap back within 48 hours after their customers opened their doors, right? So that's part of the ability. Now we can throttle that business differently, but you've got to have the tools and levers and the systems that work together in concert.

• 31:12Ted Seides?

  So once you know and have a good sense, now a very good sense of what that sort of downside operations could be, and therefore the appropriate amount of flex and operating leverage, how do you think about financing it?

• 31:23Speaker 01

  If you don't have operational controls, then you're kind of playing with fire. What we look at is we kind of say, okay, what are the systems that we have control over? How quickly can we throttle them up and throttle them back? What level of recurring revenues do you have with your customer base? What's the retention rates of those customers? What's the length of the contracts with those customers? What's the ability of that end market? Are these companies, your end customers going to go have problems where they can't pay you? And so you have to take that all into account and say, okay, should we lever this company four times, five times, six times or seven times? And then if there is a downturn, what are we going to do so that we don't have any problems with any of the covenants in that leverage? And we'd like to be very responsible about it.

• 32:05Speaker 01

  20 plus years, we haven't missed an interest payment or had any problems managing the capital structure of our businesses. But that's because we take a lot of time in the front end. Look, things happen, but we've had enough experiences with enough cycles and downturns and great financial crisis, now the pandemic, that we have a really good sense on how to manage these businesses. And frankly, I think a lot of that comes out of our deep focus on the single industry, enterprise software. And so we don't have to figure out new and different dynamics in other industries. We have a really good sense for what the dynamics are and how those companies operate. What are the systems that we need to have? And in some cases, if it's a new company, we may not have the visibility. And so we can't be as, call it forward leaning and leverage.

• 32:48Speaker 01

  But in other cases, the companies that we've had, we have a really good sense for the management team and what they're capable of and the recurring revenue nature of that business, retention rates of that business, the ability to manage the free cash flows. Then you can probably lean a little more forward to try to enhance the returns for your investors.

• 33:04Ted Seides?

  How do you think about exit strategy on businesses, particularly in light of how much you're trying to do to improve them upfront?

• 33:12Speaker 01

  I always tell our senior executives and our teams at Vista, we have to think about the absolute best that that company can be. And look, you may not ever get it right. If you hold them long enough, you'll probably get more right over time. That's really what the plan and the point is. But in some cases, things change in an industry. You might have a new competitive entrant. You might have a dislocation of some technology or industry construct that says, ah, you know what? The original investment thesis of this has changed or the environment has changed. So we have to change investment thesis. And so we're not going to be able to hold it as long and do as much work. And in some cases, you get inbound interest, which we get quite often of our companies and people kind of making you offers on the businesses. And we'll run a process in most cases that we think kind of pulls forward

• 33:57Speaker 01

  what we could realize in two or three or four years to today. Look, investors, one of the things they want is they want their capital back.

• 34:04Ted Seides?

  Right.

• 34:05Speaker 01

  And I think we do a good job of ensuring that we deliver those returns to our investors. All that said, certain businesses, I would have loved to have held a little bit longer, but because of the time in which we hold them, the construct of our industry is one of invest over five years, return over that next five. And so that's kind of, it was built 30 years ago. I don't think that model really applies specifically to enterprise software, but that's how the private equity businesses are thought about. That's how investors think about it. And so there's a duration. So there's a sense of urgency to get the work done, improve the operations. And then the question is, does it make sense to sell all of that business? Does it make sense to recapitalize that business, sell part of it? Sell none of it? And then try to deliver more and more value to our stakeholder base?

• 34:50Speaker 01

  So those are the things that we take into consideration. Every investment has to be taken on its own and making those decisions. In some cases, like, okay, this is one we probably need to sell now, given what's happening in the industry. In other cases, you know what? We'd love to have two or three more turns on this company because of its place in its market, its ability to actually capture more and more economic rent, the ability to innovate based on where they are in the marketplace, to capture that increasing economic rent. Those are all things we take into consideration at our investment committee process before we make a determination as to whether we're going to sell a company or recap it or hold on to it longer.

• 35:22Ted Seides?

  So the other side of that, you talked about the structure of called the private equity industry. And I know you've had a couple of different products, including the most recent, a long duration fund. How do you think about going in what the appropriate, let's just call it sleeve or product is for a company that you're buying when ultimately they're all enterprise software businesses?

• 35:43Speaker 01

  First, there's this kind of size criteria. For the most part, there's a size differentiation as to where they belong. We are constantly evaluating, is this a good platform company? Is this an add-on to another company? Is this the sort of company we want to own forever? And we've got our rules of engagement as to which fund it belongs to. And the good news is, the way we work, we have our private equity management committee and executive committee, et cetera. We get in and talk about those sort of potential conflicts and all this belongs in this fund versus that one. And in some cases, we'll bring our limited partner advisory committee into that sort of engagement. But yeah, it's all software at the end of the day. But at what stage is this a company that we look at and say, this is one we do want to own for the next 10, 12, 15 years? Or is this a company that

• 36:28Speaker 01

  we think that the taxonomy of the industry will lead to this being a consolidator? It should be public, right? Or the taxonomy of the industry says that this is a company that likely needs to be an add-on investment or be consolidated over time. And the good news is, the men and women at Vista have been doing this, many of them for 15-plus years, and have a good sense for how we should evaluate it. And then we make some decisions on that basis.

• 36:53Ted Seides?

  What have you seen in the external marketplace, or selling businesses in particular, about the potential signaling effect of your own actions as it relates to the underlying business that you might be bringing to market?

• 37:05Speaker 01

  We will see that from time to time. And it's interesting. You know, it's, well, the Vista selling it, is there no more economic rent that can be taken out of that market? You know, because people think we do a really good job of managing the businesses with our management teams. And in some cases, it's just because it's where it lives in its fund life. We have these funds with certain durations. And at some point in time, investors do want their capital back. Now, the good news is, and with a number of our large investors now, they're saying, hey, Let's think about ways to recycle capital more efficiently. And so we've had some very innovative agreements on that side, which I'm very excited about because people have started to really understand the durability, the resiliency, the long-term nature of enterprise software and saying, yeah,

• 37:47Speaker 01

  this 10-year construct doesn't really fit certain parts of our market. Early and years ago, when we do recapitalizations with other general partners, they were wondering, oh gee, are you guys really committed to this because you're making money on this trade here and you care about the company going forward? But I think we've done enough of these partnerships with some very large GPs that they realize that in many cases, we're making more money on the recapitalization after we've sold them half of it than we made on the first part. So they're realizing that we understand and we buy into the vision of value creation in our marketplace and they're often willing to put our money where our mouth is.

• 38:23Ted Seides?

  With all these experiences you've had with these different software companies, I'm really curious, what have you learned that you're able to apply internally as an asset management business of all of these different software tools?

• 38:35Speaker 01

  Sure. I mean, not surprisingly, we leverage a number of software tools internally in running our business to be efficient. And I think one of the most important things is getting the right people in the right seats, doing the assessments of folks to make sure that our talent management is done properly. There's some folks who do really, really well in large companies and some folks who do a lot better with smaller companies. And we start off with our investment teams, for instance, they're in a pool AXO structure and we create wonderful incentives for them, which include ability to participate in the sale, carried interest with our associates and analysts, which I think is somewhat unique in the industry. But by then, trying to figure out, well, where do they fit? And so a lot of that is

• 39:17Speaker 01

  that talent management. Like I said, some people are better at certain types of businesses than others and to communicate that. Then training, one of the things we do when our portfolio companies, we spend massive amounts of resources ensuring they have the ability to train from interns to entry-level hires to mid-level professionals to C-suite professionals to the CEO. Well, we do the exact same thing with Invista and we spend, I think, a disproportionate amount of time. What I hear other competitors do in the marketplace or the private equity firms do to train our people because I know a well-trained executive will give you exponentially more capacity and insights and efficacy than just having kind of more people that you don't formally train. So those are a couple of examples. Training, we think is critically important.

• 40:02Speaker 01

  Talent management, we think is critically important, not only in the portfolio companies, but within Vista. Then, of course, there's leveraging tools. How do we leverage distance learning for our executives? One of the few organizations that anyone in the companies can actually take in nano degrees in artificial intelligence through our Vista University construct. We believe in educating our workforce and ensuring that they have a path for progression as part of their psyche as to why I want to be at Vista. It's not just compensation. It's who am I and what am I going to be able to build in my own skill set going forward.

• 40:33Ted Seides?

  When you've extended, as you have through private equity to credit and public equity, what was the thought process in introducing that with a model that's already working so well?

• 40:43Speaker 01

  I mean, our industry has evolved over the last 20 years, Ted. You remember 15, 18 years ago, there were only a few institutions that would offer any form of credit to software companies and they did very well because they had very little competition. Most of the big lenders were out there saying, well, gee, your assets leave every night out of the elevator. And then they started to understand over time, and I think we had a role in this, that the recurring revenue nature of the relationship with customers is something that actually frankly is more resilient than some other tangible kinds of engagements with those customers. Then you look at in the age of the pandemic, people pay their software bills before they paid their rent. And so that

• 41:27Speaker 01

  realization of wow, I look at my portfolio today, 71 companies, I think we're 92% recurring revenue, over 90% plus percent in retention rates with our customer base. And the average customer you have for a decade or more, well, it creates a massive amount of certainty, especially if it's very little capex on those businesses around free cash flows. And so what that leads to is, This seems like an industry that should have a bigger and broader credit, call it expression in the capital markets. And so I think it was nine years ago or so, almost 10 years ago, we said, we need to form a credit business to not just support Vista, but the industry. People are, they'll come to it and you see it now today.

• 42:12Speaker 01

  Now you see recurring revenue loans as opposed to loans that are based on free cash flows versus EBITDA. So it took a while for us to educate part of the industry, but what that has done is drawn a lot of capital into the industry and actually created new expressions and expansions of opportunity and putting credit into software companies, which by the way, now enables them to grow much more efficiently because they can use a cheaper form of financing to drive those businesses forward.

• 42:38Ted Seides?

  And how about public markets?

• 42:40Speaker 01

  Look, I mean, we've seen this. The public markets have rerated software. I think coming out of the pandemic, there's a few investors who really understood it. The retention rates, the resiliency, the durability of enterprise software. More have come to realize that because they realized companies were blind without software during the pandemic. And many folks around the world, frankly, companies said, I have to now pivot and build more technical infrastructure. So I have more visibility. I have more flexibility in the way I manage my supply chains or engage with my customers, et cetera. So it went from being a nice to have to reduce cost to a necessity to be in business. So that has rerated software generally. But the short answer here still to that is 98% of software companies are private.

• 43:24Speaker 01

  So you don't actually have access to most of the software companies out there unless you're coming through private equity investors like us. Okay. Who are actually expressing opportunity in the form of private equity investments in these private markets. Now, what has happened is not just going to be the growth equity in the buyout. It is a full range. Our founder direct product. We just funded a deal run by a guy, Charlie Moore, called, you know, Rocket Lawyer, a fantastic guy. 230 million in a first lien senior secured securities to enable him to grow his business. And so it's not just going to be an equity. There'll be some debt that can support the growth of these businesses and what

• 44:02Speaker 01

  We want to do as Vista is really be able to supply the entire capital structure of need and opportunity for the enterprise software industry globally. And that's what our ambition is. And part of it is we just continue to build the infrastructure, maintain what I'll call the sort of returns and accelerate, which we've been doing our returns and have kind of lowest loss ratios out there. And that's an important part of building responsibly, the infrastructure to service the needs and the requirements of a rapidly growing industry, which is enterprise software.

• 44:30Ted Seides?

  In a business like this, that's proven so attractive over time, the underlying business, how is it that you're not just delused with competition?

• 44:38Speaker 01

  There's very few competitors who do the sort of deals that we do at the high end of the market, which are kind of fast growing, profitable businesses at scale. The middle market, I mean, it is, there's a lot of capital. Interesting thing is when we do our analysis, it's only probably 10% of the private equity firms out there in that space that have done half a dozen deals. We've done over 500 or so. The vast majority are looking to get an investment in software or maybe one or two investments. This is all that we do. And so we typically, and through the work that we've done with VCG and value creation, what we can demonstrate, typically if it's a business that we like, like I like to say, you know, there's A assets out there and people are paying A squared prices for them

• 45:22Speaker 01

  because they want to have an expression in software. We still have a very disciplined approach. Our returns show it in terms of what we underwrite to. Some folks will take lower returns because they may have fewer investment opportunities and other things that they've done. And we've seen it. We've been here 20 years, 21 years. We have built, I think, a phenomenal infrastructure that scales. We are constantly tuning that infrastructure, constantly tuning our approach and frankly, expanding our investor base as well.

• 45:51Ted Seides?

  You mentioned a rerating in the pricing environment a couple of different times. How do you think about the marketplace, understanding now far more than they did, certainly 20 years ago, that these are great businesses and therefore they have to pay higher prices going in?

• 46:05Speaker 01

  Yeah, it's interesting. Institutional investors, our investors, for instance, are understanding that more and more. I have, I don't know, X number of investor calls a day, a week, whatever it might be. And there's still a percentage who are saying, wow, this seems like an overinflated market and the prices are high. And if they haven't been in it like we have for 20 years, I mean, three years ago, people said that, five years ago, people said it. But as more and more investors become educated as to the value of recurring revenue, high retention rates, mission critical, business critical enterprise software, you're going to see more and more capital coming into the area because they'll see the returns and the loss ratios and say, wow, on a risk adjusted basis, this is a

• 46:47Speaker 01

  good place to be. Now, how do I get in it? Well, if you go into public markets, there's very few expressions, right, of how to actually participate in certain parts of enterprise software. Whereas if you're in the private market, we've got a very wide landscape of opportunity. And so there's an education process that has to take place. And we do a lot of that primary education with our investor base. But then as they start to realize it, then they move in that direction. It's been interesting to see some of the public market investors really start to come to more of the realization of it. And I think a lot of that is coming out of the pandemic. They saw what industries were durable, which industries were resilient, and then what industries also were called upon to solve

• 47:30Speaker 01

  problems remotely and that no one else could solve. Well, that fits right up our alley of enterprise software. So again, the basic fundamental demand of our products has actually increased over the last few decades, but has accelerated in its increase in demand over the recent times because people have realized that without it, they're lost in either understanding their current business or reaching their customers or being able to actually manage their supply chain. You're seeing some effects of that right now globally, where supply chains are still disrupted for various reasons associated with the pandemic. And some of the companies are still blind to where they're going to get supplies and products because they hadn't made the proper investments in enterprise software two, three, four, five, or eight years ago.

• 48:13Ted Seides?

  So going forward in the capital markets, somewhere in between these public markets and private markets, we have this burgeoning SPAC ecosystem, which I know you've been involved with. How are you thinking about SPACs in general and your participation in this movement, potentially to some of these private companies to public markets?

• 48:30Speaker 01

  Sure, I'll say it's been around long enough. This is kind of the third expression of SPACs coming into the public markets in my lifetime so far. And like all things, you will see a massive expansion of this opportunity because there has been less friction in the formation of them than in the past. There's been some changes in the rules and I think people are going to embrace them for some period of time. And then I think there's going to be some disappointments and potentially some regulatory changes, which we're starting to see the beginning of, which I think are going to change the attractiveness of them for companies to be part of them. Our world of enterprise software, like I tell folks, if I don't get three calls a day from somebody about a SPAC, that means I woke up late that day, or they're looking

• 49:13Speaker 01

  to buy one of our companies or have some proposal. And so from our perspective, we look at it and say, look, it is an interesting capital alternative. We of course have teams of people evaluating, does it make sense for our companies? Is something we should do? And we'll continue to do that. And at some point in time, you'll probably see some announcement about Vista has embarked on a deal in one form or another, evolving a SPAC. But we look at them, they are an interesting way to participate in the public markets in a shorter period of time than a traditional IPO. That said, there's some advantages to them and some disadvantages and you have to weigh that relative to all the stakeholders that we constantly are managing the interest of as a firm.

• 49:50Ted Seides?

  So as you look out for the next 20 years, how do you evolve the next generation of leaders at Vista?

• 49:55Speaker 01

  I look at, there's kind of pyramids of opportunity. Our AXOs, I'll talk to the investment team and I'll talk to BCG. Really, they've got to be fundamentally and technically sound in underwriting, period, end of story. The good news is we work on a lot of companies, probably do 50 deals, 50, 60 deals a year. So they have a lot of sec completed, which means we're doing multiples of that in evaluation. And so our people have an opportunity to really become expert at underwriting. I was actually just encouraged yesterday, I got an email from one of our largest investors who has completed a deal with us, a co-invest deal. And this is a global investor, billions of dollars that they invest. And they said, you all do the best diligence of anyone we've ever engaged with by heads and shoulders.

• 50:41Speaker 01

  And knowing that team and it is a MD, Senior Vice President, Associate, and I know the quality of the work that we do and it's just great to see that expression coming unprompted from a very large, very sophisticated investor. That tells me we're continuing to do the right things in the development. When you start to get into the Vice President level, we have to teach a different set of skills, which we commit ourselves to, teaching them how to source, how to engage, how to engage with management teams. And you remember the ages of these folks, I mean, they're engaging with senior executives who the age of their parents, right, or grandparents in some cases. And so we thought about this over time and how do you create the training methodologies? They know how to address them in a respectful way, but also encourage what I call the adoption of the best practices that we know are effective.

• 51:25Speaker 01

  And then when you get to the Managing Director level or the co-head level, you have to think about things differently. You're not thinking about it on an asset by asset basis. You have to think about it more than a portfolio type of basis. So I say all that to say, that's why we build committees and infrastructures to help along the way. Our private equity management committee is one that has all the co-heads. It has all the infrastructure of our capital markets and capital formation, One Vista initiatives. All those things are designed so that we holistically are developing the entire organization, including our value creation organization in VCG. Then we have an executive committee that now thinks about how do we drive culture? How do we drive values? How do we drive the things that we want to see in talent management and development? Not just within Vista, but within the portfolio companies.

• 52:10Speaker 01

  How do we drive an effective DEI strategy across 70,000 employees and 70-plus companies? How do we do it at the board level, the C-suite, the mid-level managers and the onboarding of interns and being very comprehensive in our approach? So the organizational design, I think, is critically important. So when I look out 20 years from now, I expect not only that same sort of a senior level organization design, but also us thinking about how do we create new products with our talented individuals, new products being new funds, new fund categories, new ways to express investing in the space, leveraging the people that we have trained and put tremendous resources into developing. So that's really how I think about where we are going to be 20-plus years from now.

• 52:52Ted Seides?

  It sounds like the way you've grown the organization and certainly the focus on the vertical, there's a lot of strengths in the depth of knowledge. I'm curious, are there any weaknesses you've seen over time in being just focused on one industry vertical?

• 53:05Speaker 01

  I actually had some conversations with some investors multiple times over this, and we were talking about our loss ratio, which have a kind of industry leading very, very low loss ratio. And this investor said, Robert, that tells me you're not taking enough risk. And I said, well, our returns seem to be pretty darn good. So there's a thought from certain investors, well, maybe you ought to expand faster and go into different segments and different areas and take more risk. And I'm like, well, okay, I understand that. By nature, as an engineer, which was my fundamental background, I think about building, improving out the models and the infrastructure, and then expanding and extending, not just, oh, let's go try it and see what happens. I had a good conversation with Marc Andreessen

• 53:48Speaker 01

  the other day, and we were just chuckling about his approach, of course. I mean, he's a fantastic investor. He's like, look at your loss ratio and look at mine. And he says, my loss ratio is designed that way. He's saying, I mean, I, we need to be losing 50%. And he takes that sort of risk. And so there's a whole industry that does that. We do something a little differently in that regard, but we also see the ability to expand into other areas. But I want to make sure we develop our teams to be effective managers with the same sort of mindset for value creation and moving forward on that regard as opposed to let's just go raise money just because we can and go try it. I still think about my parents were teachers. Their pension funds, we manage a lot of pension fund capital.

• 54:30Speaker 01

  And I'm sure they don't want me just to go try it. They want me to invest and not place bets. And so that's what I think about and take very seriously this whole idea of being an investor, which means to me minimizing your losses and your loss ratios while maximizing your returns. So that's really how I think about it.

• 54:47Ted Seides?

  I'm sure somewhere along the way, there must have been another industry that caught your attention because it sure looked like it had dynamics that are close to enterprise software. And I was just wondering, were there any situations where you came close and then ultimately decided not to say, okay, we're going to build another vertical in another sort of parallel sector?

• 55:06Speaker 01

  Yeah, I wouldn't say it came close. We've evaluated certain segments and spaces and I did a, I call it a nonprofit expression where I said, let's take some of these best practices and drive them. In this case, it was into minority run companies to teach them how to leverage best practices. One was a chemicals business in South Side of Chicago. One was a food business in San Francisco. One was a services construction business in Texas and with efficacy. And I could see it could work in that regard, but we did it as a nonprofit expression as a give back to the communities that have been supporting us as we've grown. So yeah, are there opportunities out there to do this? Absolutely. But when I look at the world of enterprise software, now that we have distributed computing power globally and Ted, look, fact of the matter

• 55:50Speaker 01

  is for the largest economies in the world actually don't have defined enterprise software layers. That's China, it's Japan, it is India and the Asian Peninsula. They don't have defined enterprise software. They have some enterprise software companies or enterprise software sits within companies. But there's going to be an expression ultimately where enterprise software layers as an industry is going to occur. And we as Vista want to be at the forefront of that. That's going to be far out strip of what I call any opportunity, I think, for us to move into other industries domestically at this point.

• 56:26Ted Seides?

  Great. Robert, I want to turn to a couple of closing questions. Before I do, I have two questions I want to ask you. One, not so positive. The other one's super positive. So let's start with the first one, which is obviously in the public, you've had this tech situation. And I'm curious, what did you learn from that experience? And then maybe what surprised you most in other people's reaction to it?

• 56:45Speaker 01

  Yeah, that's a good question. And I've addressed this many times, but the short answer is, you know, I followed some really bad advice some 20 years ago. I've made amends regarding that advice and mistakes I've made and been very fortunate to have the embrace of my community of support of stakeholders to move forward and get beyond that. The things surprising, like all things, you see the emergence of, I'll call it a Machiavellian nature in some people. It was a bit surprising. I've also seen, quite frankly, the complete embrace, and I call it of the beloved community of stakeholders. And that's the thing that keeps me going and propels me in that regard. So look, like all things, we all make mistakes in life. I'm just fortunate that I've had a community of people who said, let's move forward and we know who you are and let's get on down the road.

• 57:30Ted Seides?

  So on the other side, you made this wonderful gift a couple of years ago to Morehouse University and the students. And I'm curious what's happened with that and those students afterwards.

• 57:40Speaker 01

  That has been honestly, one of the greatest, I don't know, expressions in my life. And I didn't realize at the time when I made the gift, it would give me the benefits that it has. The benefits that I really derive from this is I have a monthly call with our class, Morehouse class of 2019, in engaging with these young men, answering questions about life, engaging on how to solve certain issues that they're facing as young 20-year-old African-American males looking to make their way and make a difference in this country. That is, I mean, those Thursday sessions that we have are just inspiring, they're heartwarming. It's just beautiful. And I always say, part of what my job is, and frankly,

• 58:24Speaker 01

  there's no greater thing than to liberate the human spirit. And I didn't realize that by liberating the debt burden, how much of their spirit has now been liberated and what they're able to now think about and do and accomplish. And I'll send you the whole list of what these young men are doing. It is just inspiring. And I mean, I get goosebumps every time I think about it and talk to them. And it's really a really philanthropist, or frankly, everybody's out there should be a philanthropist in one way, shape, or another. Think about how you liberate the human spirit, and it is the greatest return you will ever get in your life.

• 58:57Ted Seides?

  Fantastic. All right, Robert, I got a few more for you.

• 59:00Speaker 01

  Sure.

• 59:00Ted Seides?

  What's your favorite hobby or activity outside of work and family?

• 59:04Speaker 01

  It is truly fly fishing. I really enjoy that. And that's one of those things that actually clears my mind and I get a chance to spend time, sometimes just with myself and other times with some close friends and loved ones. And I really enjoy the beauty of nature. It's a wonderful hobby that I enjoy.

• 59:19Ted Seides?

  What's your most important daily habit?

• 59:22Speaker 01

  In the mornings, I do my spiritual readings, my prayer and my meditation. And that's probably the most important thing I do every day. Kind of fills my cup and gives me the strength and fortitude to kind of go and do the things that I think are the right things to do in this world.

• 59:37Ted Seides?

  All right. So once you've cleared your head, what's your biggest personal pet peeve?

• 59:42Speaker 01

  I'll say people who don't really listen to others. When you're sitting here in an environment and you can tell someone's not listening to the other person that's really hearing you, that bothers me.

• 59:51Ted Seides?

  How about on the investment side, your biggest investment pet peeve?

• 59:54Speaker 01

  The words, they just don't get it.

• 59:59Speaker 01

  I'm like, well, most of the people are reasonably smart. So you need to take a little more time and explain it a little more in a little more depth.

• 1:00:08Ted Seides?

  How about your favorite book?

• 1:00:10Speaker 01

  Well, I have a lot and it cascades. That's a hard question to answer. One of my favorite novels is called Standing at the Scratch Line. It's by Guy Johnson, who's Maya Angelou's son. Ibram Kendi has written some wonderful books recently. Michael Eric Dyson has written some wonderful books. Souls of Black Pho, W. B. Du Bois. I mean, there's a whole bunch that I read and reread. And if I'm forced to say it, maybe The Alchemist by Paulo Coelho.

• 1:00:36Ted Seides?

  That's great. What teaching from your parents has most stayed with you?

• 1:00:41Speaker 01

  That you are a member of a community. I just saw that every day in how they lived and that you have to take that responsibility seriously.

• 1:00:51Ted Seides?

  Great. All right, Robert, I got one more for you. What life lesson have you learned that you wish you knew a lot earlier in life?

• 1:00:57Speaker 01

  I learned a lot of things and there's three lessons and I'm going to give them to you that I give my kids. And I'll tell you the one that I learned late in life. The first one is you are enough. You are enough to solve the problems that you focus on and be the person you want to be. And I tell my kids that kind of every day. The second is discover the joy of figuring things out. And the third one is love is all that matters. And I think it's the love is all that matters. I learned much later in life and I wish I would have understood that a lot earlier in life.

• 1:01:25Ted Seides?

  Robert is a lot of fun. Thanks so much for taking the time.

• 1:01:28Speaker 01

  Dan, it's my pleasure and thank you so much. And we'll look forward to seeing you on the other side of this pandemic in person.

• 1:01:35Ted Seides?

  Thanks for listening to this episode. I hope you found a nugget or two to take away and apply in your investing and your life. If you'd liked what you heard, please tell a friend and maybe even write a review on iTunes. You'll help others discover the show and I thank you for it. Have a good one and see you next time.