As a junior at Denver's East High School in the 1970s, Robert F. Smith showed a fascination for the geekiest subject there: Computer science. The transistor held particular wonder for him. This small device, a crucial valve controlling the flow of electrons within a computer, had been invented at Bell Labs. Bell had a nearby office. Maybe he should work at Bell, too.
After securing the number, Smith phoned and inquired about a summer internship. Yes, Bell did have one, he learned, but only college upperclassmen could apply. Smith had straight A's in math and computer science. Would that count? No, Bell said, it would not. Undaunted by this initial rejection, Smith called back every day for two weeks—HR stopped answering after Day 2—and then cut back on how often he called …to every Monday for five months. Eventually, he was rewarded for his doggedness. After an MIT student didn’t show up in June, Bell called Smith. Could he come in for an interview?
“I ran my own race. I knew what I wanted, and my persistence paid off, and I came in and interviewed. They liked me, and I got the internship,” Smith said in a commencement address at American University earlier this year in which he told this story about Bell. “In fact, I worked there for the next four years during summer and winter breaks.”
Yes, his stubborn streak has indeed paid off. Smith, 52, joins The Forbes 400 with a $2.5 billion fortune and a No. 268 spot on the list of the richest Americans. (Another noteworthy point: Smith becomes the second richest African-American after only Oprah Winfrey, No. 211, elbowing aside Michael Jordan, No. 1741 on the global Billionaires list.) Smith is the founder, chairman and chief executive of Vista Equity Partners, an Austin, Texas, private equity firm with $15.9 billion in client assets.
Vista has made a killing— 30% annual returns aren’t unusual—in enterprise software, an unglamorous and fiercely competitive field where a little tough tenacity goes a long way. Smith owns more than 50% of Vista, recently valued at $4.3 billion after it sold a minority stake to Neuberger Berman’s PE unit, Dyal Partners, in July.
Once Smith made it out of Denver East, he earned a chemical engineering degree at Cornell, then worked a couple of years at Kraft Foods KRFT +%. To his parents’ dismay, he quit to attend Columbia B-school. Wall Street beckoned him downtown, and after graduation, he worked at Goldman Sachs’ M&A department from 1994 to 2000, both in New York and in Silicon Valley.
Shortly after Goldman’s IPO, Smith struck out on his own, founding Vista in 2000. (His Goldman colleagues thought him “certifiable” for that move.) Over the past 15 years, he has built up stakes in more than 30 companies. Taken together, they resemble a baby Oracle ORCL +0.44%. The companies are mostly developers of the behind-the-scenes software used to keep a business running. They stretch across a number of industries, including cybersecurity (sold by portfolio company Websense), property and casualty insurance (Applied Systems) and advertising (Mediaocean).
Date Posted: Tuesday, June 20th, 2017 , Total Page Views: 2271
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