Sep 9, 2018 · 23m · top-founders
1142 Why went public, then sold to Vista for $564m on $100m in ARR
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The Top Entrepreneurs, host Nathan Latka interviews Xactly founder and CEO Chris Cabrera on scaling the sales performance management platform past $100M ARR, navigating its 2015 IPO, and executing a $564 million strategic buyout with Vista Equity Partners.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 37.9% of the talking time here. How this is scored →
Nathan as informed peer 4.7 Guest teaching 2.3 Guest disagreement 1.2 Nathan pushing back 2.5
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 19:53 Deflecting Salesforce buyout bid
Cabrera refuses to answer Latka's direct question regarding whether Marc Benioff participated in the bidding war during the Vista acquisition.
Hardest push from Nathan ▶ 19:53 Latka presses on Salesforce biddingLatka bluntly challenges Cabrera on why Xactly didn't sell to strategic partner Salesforce and whether Marc Benioff was involved in the buyout process.
Biggest teaching moment ▶ 10:55 Explaining the liquidation preference wipeoutCabrera clarifies to Latka that going public converts all classes to common stock, thus wiping out early venture capital liquidation preference overhangs.
Nathan holds their own ▶ 5:37 Latka extrapolates ARR and Vista multiplesLatka showcases his SaaS industry knowledge by calculating monthly run rate from seat counts and citing standard Vista Equity 7.2x ARR multiples.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Episode Preview: Xactly's Growth, IPO, and Vista Buyout | 4 | 3 | 1 | 2 | Latka opens with a metric-heavy summary but makes a minor error guessing Cabrera was brought in later as CEO, which Cabrera immediately corrects by stating he is the founder. | |
| Enterprise Customer Scale, Pricing, and Market Reach | 6 | 2 | 1 | 3 | Latka runs real-time unit economics calculations ($30/seat * 400 reps * 1400 logos = $16.8M/mo) and presses Cabrera on typical private equity valuation multiples like Vista's 7.2x ARR benchmarks. | |
| Xactly's Funding Path, 2015 IPO, and Valuation Growth | 5 | 2 | 1 | 2 | Latka guides the timeline through historical funding rounds and IPO economics, while Cabrera candidly shares his disappointment with the $8 opening share price compared to his $12 target. | |
| Delisting and Strategic Rationale for Vista Buyout | 5 | 4 | 1 | 3 | Cabrera educates Latka on capital structure nuances, specifically explaining how going public cleared out the VC liquidation preference overhang so all shareholders sat in common stock. | |
| Sponsor Announcement: Relentless MV Leadership Event | 3 | 1 | 1 | 2 | Following an ad break, Latka probes into who initiated the acquisition outreach, with Cabrera describing Vista's extensive market sourcing network. | |
| Accelerating Post-Buyout M&A: AlignStar and Obero | 5 | 2 | 2 | 3 | Latka pushes Cabrera on whether Salesforce/Benioff placed a competing bid to buy Xactly before Vista, which Cabrera declines to disclose while acknowledging their close relationship. |
Statements from this episode (16)
Cabrera: Vast Majority of Companies Still Track Commissions on Excel
“The vast majority of the world today is doing it on Excel and exactly was created to create software to help drive the millions and millions of dollars that people pay and use to pay compensation out”
Cabrera: Xactly charges an average of $30 per sales rep per month
“On average, it's about 30 dollars per rep per month.”
Cabrera: Xactly has 1,400 customers ranging up to 15,000 reps
“We've got 1400 customers. Our customers are include companies that have 15, 20 reps, all the way up to 15,000 or more reps.”
Cabrera: LinkedIn and Salesforce run all sales compensation through Xactly
“LinkedIn, Salesforce.com, you know, they, these companies pay a hundred percent of their sales forces using our tool.”
Cabrera: Xactly passed $100M in revenue before its sale to Vista
“We took the company public in 2015. We then sold it to Vista about seven, eight months ago. And, you know, we were, you know, north of a hundred million dollars at that time.”
Cabrera: Xactly reached $60M to $70M in revenue before its 2015 IPO
“Yeah, we were probably in the high sixties, seventies.”
Cabrera: Xactly netted $50M to $55M from its 2015 IPO
“I think we raised about sixty million, and after all, the bankers got their money, and they're well-deserved I think we took home maybe 50, fifty-five million, somewhere in that range.”
Cabrera: Xactly raised $86M across multiple rounds prior to its IPO
“Oh yeah, so we had raised eighty-six million prior to I founded the company on 800 grand of angel money, and then we did an A round that year of four million And then just about every year in those early years, we were raising money, so we raised four, then we…”
Cabrera: IPO pricing is beholden to market whims during a two-week window
“I think if you've ever taken a company public, you know, you're really beholden to the whims of what's happening during that two week period that you go public.”
Cabrera: Vista acquired Xactly at $16 per share, doubling IPO investors' money
“Everybody, you know, bought in at eight, sold at pretty much 16. So everyone doubled their money. That's what we sold to Vista for.”
Cabrera: Xactly hit targets for all eight quarters as a public company
“We were public for eight quarters, we made our numbers every quarter but it was tough,”
Cabrera: Xactly completed two acquisitions within seven months under Vista
“And in seven months, we've already done two acquisitions.”
Cabrera: Vista Equity Partners has visibility into nearly every tech deal
“One thing I've learned about Vista is these guys are super, super sharp and they have tentacles everywhere. And so there's not many deals that go down that, that they don't know about. And people would be stupid not to bring it to them.”
Cabrera: Vista finalized its acquisition of Xactly in a matter of weeks
“The deal actually came together very fast once we once we reengaged. I don't remember the exact timeframes, but it was a matter of weeks, really.”
Cabrera: Salesforce was Xactly's first customer and an early investor
“They were an investor in the company early. If you read my book on Amazon game, the plan, you can read how they were really the people that caused me to leave my previous company to start this company. And Salesforce was our very first customer and is today ou…”