The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 23 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 1 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Bravo: Every company is worth only its future cash flows
“Look, we believe every company in the world, Is worth its future cash flows. We just come from that world. We don't believe in multiples of revenue. We don't believe in, ah, a technology may be worth a trillion dollars or a billion dollars because it might do …”
Bravo: Supporting 40 to 50 portfolio companies operationally is impossible
“If you have an investor, private equity or venture firm, that claims that they make a big difference in their companies, that they're there with those companies operationally, that they change them in a positive way. And you have 40 or 50, there is no way you …”
Bravo: Lower tech market valuations represent the new normal for years
“So if I, if you really push me, I would say, yes, this is the new normal, because I don't see investors jumping in in mass To do the same thing that in the last 18 months lost them 80% of their money. At least not in the next few years.”
Bravo: PE firms cannot triage underperforming portfolio investments like VCs
“There's no such thing in buyouts and private equity as triaging your portfolio and deciding what you throw away and when you keep going, which in another way to put it is, is actually a big motivator to management teams to partner with you because you have no …”
Bravo: Thoma Bravo avoids IPOs because cash-generative companies avoid dilution
“I mean, in our history, we have mainly exited to strategics and other financial buyers. And there's a reason for that is the IPO for our companies doesn't give us that much in itself because our companies generate the cashflow that is needed to fund their inve…”
Bravo: Increased fund size directly correlates with reduced investment performance
“The LP community is really, really smart. And there is a direct correlation between that, that we cannot argue with. And it is there.”
Bravo: Thoma Bravo requires 100% unanimous consensus on all deals
“We don't do any controversial deals. We are. 100%. Everybody consents. If somebody really has a problem with that deal, there's something really wrong. Once again, we've worked together, all of us, for almost 20 years. We're looking at the same industry. We ha…”
Bravo: A $10B buyout mistake is fatal, unlike early VC checks
“In a buyout, you could be writing a ten billion dollar equity check with your partners, and you cannot get that wrong. That would be really fatal, making a mistake on something that big, which is an interesting disconnect sometimes between the technology world…”
Bravo: Unprofitable software forward revenue multiples dropped from 17x to 3.5x
“The revenue multiples on those have gone from an average of 17 times forward to 3.5 today.”
Bravo: Thoma Bravo requires target company inefficiency to drive excess returns
“Give us enough inefficiency so we can earn a differentiated return. If you have a perfectly run business, then it's going to sell for a retail value on that cash flow, and we may not have enough delta to create an additional return from our efforts and from ou…”
Bravo: Greater operational efficiency accelerates software business growth
“In our world, the more efficient you are, the faster you should grow.”
Bravo: The best-run tech companies with 40% cash flow margins win
“What we can control is having the best run company in that field. And when times get really bad, the best run company always wins. Because then you'll have 40% cash flow margins. You're very well put together. You're budgeting conservatively. You're not missin…”
Bravo: High-margin, unprofitable software companies make prime buyout targets
“The more we studied these companies, the more we realized the recurring revenues are really strong, but none of them were making money. So we developed an approach that said, no, with 90, 80% gross margins, like today, these companies can be buyout candidates …”
Bravo: Most software companies fail to segment costs for profitable growth
“We see even today the world of software, which are much better innovators today than they were 10 years ago, than they were 20 years ago, but these businesses mainly have a big bucket of revenue and a big bucket of cost, and they don't really separate their ac…”
Orlando Bravo was almost fired from his PE firm in 1999
“I felt that my career was a failure in 1999. I had come out of Stanford Business School and Law School. With what I thought was this like blue chip, pristine, right? Education and resume. And I had very high expectations of myself and a timeline for which I ne…”
Bravo: Competitive deals are never over even if trailing on price
“I tell myself when working on a competitive investment situation in which there is another suitor for the company or many, the deal isn't over. You could be losing. You could be behind on price. You could be losing something. Maybe your operating plan is not y…”
Bravo: Critics claim Thoma Bravo overpaid on almost every deal
“And I almost cannot tell you of a deal where a peer or competitor or an outsider, I cannot almost say one single deal where they haven't criticized us for paying too much. It's truly, truly amazing. So Coupa Anaplan and whatever other investments are no except…”
Bravo: Thoma Bravo targets 12 to 15 portfolio companies per fund
“Per fund, we'd like to have 12 companies, maybe 15.”
Bravo: One-third of management committee works directly on each deal
“And we try, what we try to do is, actually what we do is we have at least a third of the management committee Be involved in that deal day to day. And therefore you have two leaders and two senior partners that can talk about it and are living that journey whi…”
Bravo: Philanthropy is hard because foundation budgets contain only costs
“When I go through the budget of a company, you see this hopefully wonderful earnings coming out from all the work, and you have revenue and cost, and you can measure that. When you do a budget for your foundation, you only have cost.”
Bravo: Turnarounds require breaking problems down, measuring, and delegating
“What we would do, and what he would always tell us to do, is measure. Take a big problem and divide it into many component parts. Prioritize which parts are more important And then within those parts, measure where you are and begin the journey towards improvi…”
Bravo: Profitable software trades at 25x forward P/E versus S&P's 16.5x
“If you look at the public market as a benchmark for the world, and you take an index of the profitable software companies, those companies that have margins in excess of 20%, and you put them all together, on average, They trade for around a 25 forward PE, whi…”