The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC: Thoma Bravo's Orlando Bravo on Why Now is The New Normal, Why Every Company in the World is Worth its Future Cashflows, The Three Core Elements Thoma Bravo Need to See in Any Potential Deal & Orlando's Relationship to Risk, Wealth and Parenting

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Feb 6, 2023

Orlando Bravo, the Founder and Managing Partner of Thoma Bravo, shares his insights on value investing and software buyouts. He emphasizes that every company is worth its future cash flows and reveals the three crucial elements he looks for in potential deals. Orlando discusses his journey from Puerto Rico to becoming a top dealmaker, influenced by key mentors, and reflects on the changing landscape of the software industry. Additionally, he offers poignant thoughts on wealth, parenting, and the importance of balance in professional and personal fulfillment.

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ANECDOTE

Thoma Bravo's Origins

Orlando Bravo's mentor, Carl Thoma, gave him authority and responsibility early in his career.
This led to Bravo focusing on tech and capitalizing on the dot-com bubble burst by buying cheap software.

INSIGHT

Value Investing Philosophy

Thoma Bravo believes every company's worth is derived from its future cash flows, not revenue multiples.
They prioritize growth and value, seeking yield and multiplying it by growth potential.

ADVICE

Building Great Companies

To turn innovators into great companies, measure and break down problems into smaller parts.
Delegate authority and responsibility for each part to drive improvement and profitable growth.

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Orlando Bravo is a Founder and Managing Partner of Thoma Bravo. He led Thoma Bravo’s early entry into software buyouts and built the firm into one of the top private equity firms in the world. Today, Orlando directs the firm’s strategy and investment decisions. Orlando has overseen over 420 software acquisitions conducted by the firm, representing more than $235 billion in transaction value. Forbes named him "Wall Street’s best dealmaker" in 2019, and he was dubbed "Private equity’s king of SaaS" by the Financial Times in 2021.

In Today's Episode with Orlando Bravo We Discuss:

1.) From Puerto Rico Roots to Wall Street's Best Dealmaker:

How did Orlando come to co-found Thoma Bravo? What was that a-ha moment for him?
Orlando mentioned 2 mentors that shaped how he thinks, who were they? What are his single biggest lessons from those mentors?
What does Orlando know now that he wishes he had known when he started his career?
Why does Orlando disagree with setting timelines in life? Why does it not help?

2.) The Secret to Success in Value Investing:

What is good value investing today? What is it not?
What three things does Orlando look for when doing a deal and acquiring a company?
Why is every company in the world worth its future cash flows?
How important is price today? How does Orlando reflect on his own price sensitivity?
Many suggest Coupa and Anaplan were extremely expensive. How does Orlando respond and defend the prices he paid for companies in 2020-2022?

3.) WTF is Happening In Markets Today:

How does Orlando reflect on where the market is today?
Is this the new normal? How does Orlando expect the market to change over the next 12 months?
Why does Orlando believe that the best companies win in the worst times?
Is this the result of quantitative easing on behalf of central banks? Who is to blame?
How does Orlando balance the mindset of his team between risk on and taking advantage of lower prices in market but also not catching a falling knife?

4.) Orlando Bravo: The Leader, Father and Husband:

What is Orlando's biggest fear in investing? How has this changed over time?
How does Orlando reflect on his own relationship to money today? How has that changed?
What are Orlando's biggest parenting lessons from his mother?
Why does Orlando believe that for most people, their late twenties are their toughest?
How does Orlando instill the same drive and ambition in his children that he had, despite very different financial profiles growing up?
How does Orlando maintain being at the top of his game in his profession but also being a great husband? What is the secret to a happy marriage?

Items Mentioned in Today's Episode:

Orlando's Fave Book: The Power of Now: A Guide to Spiritual Enlightenment