Thoma Bravo wants Apttus to move on, but legal accusations and employee discontent continue with focus on a contentious executive

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  • Five months into Thoma Bravo’s acquisition of Apttus, some employees are discontent and say they’re still waiting for management to address growing concerns over Chief Revenue Officer Raj Verma, who some employees accuse of creating a hostile work environment.
  • At least two former employees have retained legal counsel to explore lawsuits naming Verma, Business Insider has learned.
  • Apttus’ CEO told Business Insider in a statement that “any ongoing focus on rumor or gossip is misplaced, demonstrably false and ultimately not reflective of Apttus’ trajectory or the feelings of its employee base at large.”

When employees of software company Apttus gathered for the first all-hands meeting of the fiscal year on Thursday February 14, the message from management was one of empathy. 

“You’ve been through a lot,” said one of the speakers, an outside leadership consultant hired by Apttus to improve the company culture.

Reeling from the hasty departure of the founding CEO Kirk Krappe amid sexual misconduct allegations and a takeover by a private equity firm in October, Apttus employees have had their share of drama. 

So the soothing words were welcome, said one person who was on the call, who added the comments were the first of their kind.

But the event also underscored an ongoing source of friction, as some in the audience struggled to understand why the healing process included a top executive they associated with some of the company’s biggest controversies.

Multiple former employees have made legal accusations seeking settlements with Apttus related to the alleged behavior of Chief Revenue Officer Raj Verma, people familiar with the matter previously told Business Insider. At least two other former employees have retained counsel to explore lawsuits naming Verma, according to a person familiar. 

At the heart of the grievances, the people said, are allegations that Verma facilitated a hostile work environment and “boy’s club” of preferred employees that made it difficult for women, and other outsiders, to succeed at the company.

Apttus’ new private equity owners initially raised hopes inside the company that change was on the way. But nearly five months after the deal, Verma continues to run a significant portion of the business and there are no signs that he’s going anywhere. 

“If someone tells me that Raj is here and he’s here for good, then I would leave. But I hope that he’ll leave soon either on his own or that he gets pushed out,” an Apttus employee tells Business Insider.

As part of its series investigating the turmoil at the troubled enterprise tech startup, Business Insider has spoken to more than a dozen current and former Apttus employees as well as people close to the company, nearly all of whom requested to speak anonymously for fear of retaliation or due to legal stipulations.

Like it or leave it

Since Thoma Bravo took control of the company in October, it has promised to invest in growth and reshuffled much of the Apttus leadership team. But one of the company’s most controversial execs, along with a circle of his hand-picked lieutenants, remain in the upper ranks. 

Verma has been accused of creating a hostile work environment by multiple former employees who have made their claims known to Apttus, Business Insider has learned. Although the exact details of the confidential claims could not be learned, people with knowledge of them said they involved allegations of a hostile work environment, as well as gender and age-based discrimination.

In addition to those claims, at least two other employees have hired lawyers and are considering filing public hostile work environment lawsuits in California and Texas which would specifically make allegations about Verma, according to a person familiar with the matter.

Several current and former insiders attribute a culture of bullying and fear that they say permeated the company to Verma, who joined Apttus from Hortonworks in September 2017. Just minutes into one of his first internal meetings, multiple people said, Verma made his managerial strategy clear: if you don’t like what’s going on at the company, get out.

The employee who told BI he hopes Verma’s days at Apttus are numbered described the executive’s style in meetings as “negative and derogatory.” Employees who raised questions about plans or who focused on inconvenient data could find themselves the target of ridicule or name-calling, several people told Business Insider.

Verma did not respond to requests for comment.

Apttus CEO Frank Holland told Business Insider in a statement that the company’s leadership team was “beyond compare in its industry.”

“Any ongoing focus on rumor or gossip is misplaced, demonstrably false and ultimately not reflective of Apttus’ trajectory or the feelings of its employee base at large,” said Holland.

Fine wine and Panda Express

Vulgar language and hand gestures, though hardly unique to Apttus, became the norm under Verma, multiple employees said. And several insiders described a tendency toward behavior and comments that they perceived as inappropriate in a workplace.

One early employee summed up his experience under Verma’s leadership in a resignation letter sent to Apttus Chairman David Murphy soon after the acquisition.

“As a human being, you only can take so much of this brutality and for me, I chose not to be a part of a company where employees are devalued, bullied, and treated like dirt,” the person wrote in the letter obtained by Business Insider.

Illustrating what she saw as part of the culture issues at the company, a former employee told Business Insider that she declined an invitation from Verma to go to his hotel room for celebratory champagne during a company event. After that, she said, he declined to meet with her for a scheduled meeting and removed their connection on LinkedIn.

Apttus was not previously made aware of this allegation, according to a source familiar with management.

Another source recalled frequent jokes that may be seen as reinforcing a male-dominated culture. 

“I’m like Mike Pence; No women; If we’re drinking here, no women,” Verma once said in front of several colleagues, referring to the famously religious US Vice President, according to the source.

Others described behavior that, at the very least, they say, did not serve to endear Verma to his colleagues. While the Apttus sales team dined at a Panda Express fast-food outlet after touring Universal Studios during the sales kick-off event in Burbank, Calif. earlier this year, Verma and his entourage broke away for a private dinner at the pricier hotel restaurant.

At another group dinner during the same multi-day event, most attendees found red table wine on their tables. Verma’s table, some noticed, was stocked with an attractive bottle from Silver Oak Cellars, a high-end winery whose bottles range in price from $80 for the least expensive, all the way up to $865, according to Silver Oak Cellars website.

Employee concern heightened around the time of Thoma Bravo’s acquisition when paperwork was sent to all share holders which indicated that Verma could receive a parachute package valued at $26.5 million, including potential severance and equity awards. A large portion of the payments are contingent on shareholder approval. It is unclear whether shareholders approved of the payments.

Shrinking numbers and morale

Within Apttus, the past year has been marked by hardship and challenges. Around 250 staffers were laid off globally in August ahead of the sale, and continued attrition has dramatically reduced Apttus’s ranks. The company once leased six floors in a prominent San Mateo, California building, including one floor with panoramic views used primarily for office-wide meetings. The company now leases just four floors, according to one source close to Apttus management.

Employee morale hit a new low last week when Thoma Bravo informed Apttus employees that they wouldn’t receive their annual bonuses at the end of February, as many expected. Instead, one employee said, bonuses are now due to be paid in April after a company-wide audit. That set nerves on edge as some staff worried over whether they would still get their bonus, according to the person.

The source close to Apttus management said the company planned to hire 400 people in the coming year to “keep pace” with topline growth.

Apttus_objectiveBut by many accounts sales have suffered due to a shifting competitive landscape.

Though Apttus was built on Salesforce, that relationship frayed when Salesforce bought a competing software company called SteelBrick at the end of 2015.

From then on, Apttus shifted its focus to building and selling a new version of its product built on Microsoft.

The shifting allegiances led to dismal customer renewal rates and uncomfortable conversations between sales people and their dissatisfied clientele, according to multiple people familiar with the matter. Some clients have even tried to get out of existing contracts worth millions of dollars, some of the people said. 

In the fiscal fourth quarter, which ended in January, just 59% of customers renewed their contracts with Apttus, down from 86%, 89% and 81% in the previous three quarters, according to an email sent to staff. The norm at other SaaS companies is above 90%. 

Current and former employees attribute this to what they see as the company’s history of over-promising and under-delivering in the sales process, which burned customers and led to disappointing renewal and attrition rates.

Holland seemed to acknowledge this in the all-hands when he announced a new product strategy. Moving forward, Apttus will refocus its resources on supporting and selling its Salesforce platform products, instead of the Microsoft platform products that had been the focus over the last couple of years. 

Holland also announced several major changes at the company, including three independent leadership and communication consultants hired to run additional surveys and focus groups with the goal of creating official company values by June.

These promises were late but welcome among some in the audience. But it may take a lot more to repair the culture — one of the insiders described the leadership team’s message as overly-focused on moving forward without giving enough acknowledgement to the residual decay left over from the old regime.

“We want to be told exactly what they’ve been told about what’s wrong with the company, to admit it and address it,” the employee said. 

Apttus CEO Frank Holland shared the following statement with Business Insider.

“Apttus’ market opportunity remains unparalleled and continues to grow. In partnership with Thoma Bravo, winning business methods and strong organizational values remain Apttus’ highest priorities. Enhancements such as the addition of seven new senior executives, including the onboarding of a new Chief People Officer, updated training, educational, and cultural programs are essential ingredients in this process.  Any ongoing focus on rumor or gossip is misplaced, demonstrably false and ultimately not reflective of Apttus’ trajectory or the feelings of its employee base at large. Apttus’ leadership, capabilities, and dedication to customer service and excellence are beyond compare in its industry.”

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SEE ALSO: A trip to Cabo, an allegation of sexual assault, and ‘a culture of dishonesty’: Inside the downfall of the founding CEO of $1.9 billion startup Apttus

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