Vista Equity Laying Groundwork to Move Three San Diego Companies

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more than 55,000 global customers, including marathons, recreational sports leagues, campsite reservations, hunting and fishing licenses, and company conferences, meetings, and retreats. The company went public in 2011. At the end of 2012, the Active Network had more than 3,000 employees around the world, according to its annual report, including more than 700 at its San Diego headquarters.

So far, there is no external indication of Vista Equity’s plans. All three San Diego companies continue to list San Diego job openings on their respective websites, and commercial real estate executives said they were unaware that Vista Equity was laying the groundwork for a move.

“I really hope that it’s not true, because it really would be a shame for those core software capabilities to leave San Diego,” said Jeb Spencer of TVC Capital, a San Diego private equity firm that specializes in software deals.

Nevertheless, such a move makes sense, Spencer said.

“The resources here are beyond expensive,” Spencer said. “We know the tax structure [in California] is unfavorable to business and individuals, and I imagine their margins would improve 10 percent by making the move.” In Texas, Spencer added, “The rent is less, taxes are less, and I’ll bet salaries would be 30 percent less expensive there.” (Texas has no individual or corporate income tax; corporate income tax rates in California vary from 1.5 percent to 10.84 percent, depending on the type of corporation.)

Jeff Lunsford, a longtime San Diego software executive who is now CEO at Tealium, a San Diego startup that provides a Web platform for managing Javascript tags, said he doesn’t see it that way. “We clearly believe San Diego and California are great markets for building high-tech, high-growth startups,” Lunsford said. “We’re certainly growing here and we’re able to find great people here.

“I don’t want to say anything about Texas,” Lunsford added. “It is a great market, and it does have a great tax structure. But I’m not sure it makes that much difference when you have a high-tech, high-growth startup, because they’re not making money anyway.”

David Marino, executive vice president of the San Diego commercial real estate company Hughes Marino, said the departure of three well-established software companies would be “unfortunate, but it wouldn’t be catastrophic” for the commercial real estate market here.

“I have been hearing a lot of concern from employers these days about the difficulty in hiring smart, hard-working people,” Marino said. “We’ve got a number of companies that are looking to hire 100 or more people next year, and they’re kind of scratching their heads in terms of where they’re going to find them. This would certainly put a lot of those high-quality employees back on the market.”

Spencer also noted the departure of three of San Diego’s biggest software companies could have a huge impact on the ecosystem for software startups in San Diego. That would depend, though, on the number of senior engineers and executives who decide they would rather stay in San Diego than move to Texas.

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Bruce V. Bigelow was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Follow @bvbigelow

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32 responses to “Vista Equity Laying Groundwork to Move Three San Diego Companies”

  1. ALBsharah says:

    That’ll be a huge shame if they clear out these great companies from our ecosystem. The positive is that there will be great opportunities for new employees, but that’s a very short-term view of the situation. The startup community in San Diego can only continue to thrive if successful companies continue to grow here and actively give back to that ecosystem. I really hope this doesn’t happen.

  2. KristinJ89 says:

    bastards

  3. EngineUSA says:

    Vista has already started replacing San Diego, Cali jobs with cheap China labor, so the move to Texas is just icing on top of it all. This another good example of why the US economy will continue to deteriorate; white collar and technical jobs are being exported.

  4. empirenine says:

    I worked at Active for 5 years and know a lot of talented people that still work there today. So while its an undesirable roadmap for Active, the upside is that there will be an injection of tech talent in San Diego in the near future.

  5. RC says:

    this is hearsay. wait till things pan out.

  6. Concerned Employee says:

    I am curious to hear Vista’s response to this. Then again we will never get a straight story until it happens.

  7. Former Websense employee says:

    Oh Websense is moving, the CEO told the entire company during the last all hands a few weeks ago along with a huge picture of Austin in the background and all the “great ” companies that call Austin home. Furthermore they already have the building, it is 10 minutes from Austin next to a big man made lake in a corporate park…Google Earth not hard to spot with just that info.

  8. swalsh55 says:

    I wrote code at Active until 2012 and honestly the acquisition spree they went on after going public put them in a huge technical hole they still haven’t climbed out of. A local startup with clean apps could certainly make a decent run at displacing them in the San Diego area by taking advantage of local relationships and the far higher flexibility of a smaller company.

    Just don’t lease the most expensive office space in SD (La Jolla & then the top of the hill in Sorrento Valley, seriously guys?), and then grow from there. Just don’t sell out and go public to avoid a repeat performance. I think most people would be boggled at how easy it really is to do what most of these companies do.

  9. I agree with Al on the employee front, those startups and fast growing companies in San Diego seeking talented tech and middle management may have a mini-gold rush soon enough….

  10. Current Websense Employee says:

    Hopefully yesterday’s board meeting produced some answers that will soon be communicated to us.

  11. James says:

    Stay classy San Diego…

  12. Worried says:

    Websense layoffs are starting.

    • worried as well says:

      how many people are being let go? any idea?

    • Didi says:

      Keep us up to date because I work for Active Network and I’m very concerned that they will be laying us off in October…

      • Christo says:

        Yes current employee would like to know…. but the transparency management speaks of at Active is 0% visibility. Any news of the Texas move in 2014? Is this 100%?

  13. Am I next? says:

    Websense is paying people off today.

  14. Current Active employee says:

    We’ll have a all staff meeting with the CEO next week. Hopefully we will have a better picture of what is going on. I don’t want to move to Texas. Has anyone seen the Websense or Active building in Austin?

  15. StuTheDog says:

    I’m also an Active employee and can attest that we have a ton of top heavy administrators, we can lose 1/2 of them tmro without missing a beat. I like this move, gonna be an interesting year.

  16. GKSanDiego says:

    I won’t be buying anything from those companies including Websense who I’ve purchased from in the past. Moving to TX will kill the innovation all have brought to the market.

    Beyond that, Vista Equity is simply going to pump up their book value, load them up with debt, dump the companies and people and move on to their next corporate victims.

  17. exactive says:

    Well they did get rid of the CFO of Active a few weeks ago with no warning.

  18. Employee2 says:

    In a preliminary report, Websense projected it would hire 23 executives – 50 percent local hires – at an average wage of $250,000. The company is also eyeing 48 mangers at $150,000 annually with 75 percent hired locally, 92 supervisors at $95,000 annually with 80 percent hired locally, 123 staff at $70,000 annually with 80 percent hired locally and 184 entry level workers at $45,000 with 85 percent hired locally. http://www.bizjournals.com/austin/blog/at-the-watercooler/2014/02/behind-the-scenes-how-websenses-proposed-austin.html

  19. Current Active member says:

    First round of layoff at Active started yesterday. A 100 positions elimitated. For most of the positions elimated a new position opens at Texas.

  20. Nicole says:

    We’re hiring ! Talented designers, developers, software engineers, finance executives…adboomgrp.com! check us out

  21. rocker says:

    I interviewed last year at Active and did really well. I am glad I did not take that position. I moved from Texas to be in San Diego and now this happens. Phew!!! sometimes things happen for a reason. Some really smart people there , so I do feel sorry for them. If they do decide to move then they will looking for new jobs in Texas within a year. Beware of Texas …its just different and yes enjoy the summer its lovely ;-)

  22. Lisa says:

    What happened to the stockholders? Some have disappeared over the years as former employees. Who brokered the sale?