Let’s talk about something uncomfortable but important: the companies you trust with your most critical operations are quietly changing hands, and it’s not in your favor.
In the software industry, including Ticketing CRMs that specialize in serving the nonprofit arts and culture sector, many of your trusted vendors are shifting from individual ownership to control by Private Equity (PE) and Venture Capital (VC) firms. I know this sounds like corporate inside baseball, but here’s the reality: it directly affects the service you receive and the costs you pay.
When Profit Becomes The Only Priority
Here’s what’s really happening. When PE and VC firms acquire companies, they’re not interested in building lasting relationships with you. “Working with you as a “partner” is more marketing window dressing. They’re making calculated bets designed to maximize returns within 3-6 years, then move on.
This creates a painful reality: your needs as a customer are now competing with investor demands for aggressive profits. And honestly? You’re not winning that competition.
What Actually Changes When PE/VC Takes Control
- Service Quality Deteriorates: They cut staff to boost margins, which means you wait longer and get less help when you need it
- Prices Increase Rapidly: Multiple price hikes become the norm because investor expectations matter more than your budget
- Innovation Stagnates: Why invest in making things better when you can just extract more money from what already exists?
- You Become a Number: That personal relationship you valued? It gets replaced by automated systems and distant call centers
Real Examples You’ve Likely Seen
- Toys “R” Us, When Debt Becomes Destruction: In 2005, KKR, Bain Capital, and Vornado purchased Toys “R” Us for $6.6 billion, loading it with $5.3 billion in debt. The company filed for bankruptcy in 2017, eliminating 33,000 jobs while the PE firms extracted over $470 million in fees. (Source: In These Times)
- Healthcare Gets Harder to Afford: When PE-backed Envision Healthcare took over emergency rooms, doctors sued, noting the firm’s strategy of “slashing costs, such as employee benefits and pay, or raising prices of services and goods.” (Source: NBC News)
The pattern is clear and painful: private equity investors now drive 61% of all Software as a Service (SaaS) acquisitions (which include Ticketing CRM providers), and equity-backed SaaS companies spend 89% more on sales and 100% more on marketing compared to bootstrapped companies, costs that ultimately get passed to customers. (Source: Software Equity Group)
Why Individual Ownership Feels Different (Because It Is)
When someone owns their own company, they’re not just managing an investment, they’re protecting something they built. The difference in how they treat customers isn’t just noticeable; it’s transformational.
- Relationships Are More Than Transactional: Individual owners don’t have artificial exit timelines. Your success becomes tied to their success, not just this quarter’s numbers.
- Accountability Has a Face: When something goes wrong, you’re talking to someone whose name is on the door and whose reputation depends on making things right.
- Sustainability Over Profit-At-All-Costs: Individual owners can grow steadily and sustainably, rather than chasing the impossible growth rates that institutional investors demand.
Six Hard Questions For Your Current Providers
Before you commit to any Ticketing CRM contract, ask:
- Can you provide a complete ownership breakdown with percentages for every stakeholder? If they won’t share who controls the company and by how much, that tells you everything.
- What are the specific terms and timeline of your investment agreements? PE/VC firms typically have 3-6 year exit requirements that will directly impact your relationship
- Who has board control and voting rights on major decisions? If investors control the board, they control your vendor’s priorities.
- What revenue growth targets are you contractually obligated to hit? These aggressive targets drive the price increases and service cuts you’ll experience.
- What’s your policy on layoffs when revenue targets aren’t met? PE/VC-backed companies routinely cut staff to protect profit margins, which directly impacts your support quality
- Have any of your investors previously been involved in companies that went bankrupt or had major service disruptions? Their track record with other companies predicts your future experience.
Why UpStage Stays Independent
At UpStage, we’ve chosen to remain individually owned, and I want to be frank about why: because we believe your relationship with us should matter more than our relationship with investors.
We get multiple inquiries every single week from PE and VC firms wanting to acquire us or gain a majority ownership in our company. But it doesn’t matter how sweet they make the offer, we don’t t consider any investor that demands majority ownership control.
Here’s why that matters to you: when we make decisions, we’re thinking about whether it helps you succeed, not whether it satisfies people who’ve never met you or understood your mission.
The Choice You’re Really Making
Choosing a software vendor isn’t just about features or price. You’re choosing who gets to make decisions about your future.
Do you want those decisions made by people who know your name and your challenges? Or by investment committees optimizing portfolios you’ll never see?
The companies that will be here for you in five years aren’t the ones focused on extracting maximum value today. They’re the ones building something meant to last, just like you are.
