Thoma Bravo

“So the Toma Brava. They are reincarnated Providence Equity. We started off as specialists. They took it to a whole new level, this to a whole new level.”

“Software itself is extending into becoming the business. I was having a lunch yesterday where this venture capitalist was asking if we would invest in business models where the business model may be you're selling a financial service, but you're a software com…”

“The fact that valuations have been high, some claim too high, Actually, it's a barrier to entry. It keeps big players that could be new players or new entrants out of this market. There should be 20 or 30 private equity firms doing large buyouts and software. …”

“We say that as long as people are making positive progress, you stay the course. Even if that progress may not be fast enough for your investment case, because people move at different speeds.”

“We do monthly operating reviews from eight a.m. To noon every month instead of these strategic board meetings, and in those ops reviews, we have all the direct reports of the CEO present together collaborating, and we go through each of those areas.”

“The typical deal will look like five hundred million to a billion of recurring revenue. Number one or number two player in an application space, cybersecurity space, or infrastructure software space.”

“Our philosophy is to work in very small project teams, because when you do that, you give the associate on the deal, the VP on the deal, all the participants a very broad job, and when you have broader jobs, you become a lot more creative.”

“So sometimes it's good that they miss numbers because it gives us an opening to have them listen to us and become more open-minded.”

“Hearing what people are talking about on phone calls and in the office is key. If you walk around Toma Bravo, most of our colleagues will be talking to companies about Sales plans and quotas, and they may be on a board call. It's a lot of operational talk. If …”

“Our best in class metrics before were 25% EBITDA margins. Now we're getting up to 50. LMA got up to 60%.”

“Now, we do have 25 operating partners that work across all of these companies, so a lot of the sharing happens.”

“We tried to raise a billion, we ended up raising eight, 22.5. That tells you we're looking for every penny, like every 500,000 we would take. The few that did, that fund returned for net, And then it gave about a one X multiple in co-invest that was great econ…”

“You don't need more than five or six people in the deal team. You don't need 20. What would they do? They even have a hard time catching up with one another.”

“We are really growth investors in companies where you can add significant value to your product ongoing because you have to. If not, you'll be displaced by another SaaS solution.”

“Now, in hindsight, based on where software has gone, we should have held all the companies. And if we would have done that, we would have been much larger than SAP.”

“I think for our organization, Atoma Bravo, What holds us together is our passion for doing innovation right, meaning profitably, by measurement, by hitting numbers, by when an LP comes to visit us, what companies are unplanned and not unplanned. We're really f…”

“Our philosophy is to really stay with the existing management.”

“We onboard the company into our reporting package. That has our hundreds of metrics by division, functional area, and potentially business unit if the company has multiple business units. That takes about three months of work.”

“In five years, we're going to be double the size. We have eighty billion dollars under management, and we can tell how the portfolio is going to do.”

“And we actually need the capital because the industry needs it for us to buy these number one, number two players. They're growing at 20% compounded.”

“Our average holding period has remained at 3.3 years. Even as deals have gotten a lot larger and valuations have gone up, it just hasn't changed.”

“We don't have an org chart, because everybody knows what their job is. We look to transfer ownership Over time.”

“By being in this market, we're not adding any work because we're already in these verticals. We're already talking to these companies. We're already interfacing with them. This is what we do. This adds value to our core business, and it makes us more informed …”

“The big one is how so many market participants explain the market as if it's true. So for example, when they say, well, the reason this time is not good for IPOs is although the market is up, that's the secondary market, but the primary market is struggling ri…”

“In that fund, we articulated that 50% of what we did was going to be early stage venture And 50% was going to be growth equity, which is not what we hear about in the growth stage today, but more firms which we backed, like Toma Bravo in their first software-f…”

“It took about a year, which is not, you never, we certainly, because we owned a overwhelming majority of the business, it was not something that we expected, but the stock did so well. And it, there was sort of constant opportunity actually to provide liquidit…”

“Mark, you are in a unique situation where you've taken a business to our value was seven billion dollars.”

“We were still a very high growth startup, north of 60% Annually at that time, but barely making money to be blunt.”

“Historically, and especially in tech, private equity was not buying companies that were considered innovators or high growth. So it was a departure from what you would see in a typical private equity investment at the time. It's become our business today. And …”

“Which led to our first ever IPO as an investment firm to eventually acquiring SailPoint again in 2022.”