Feb 27, 2019 · 19m · top-founders
1313 He Runs $1b Buyout Fund Think3 Giving Founders Free Time for Second Shot on Goal
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The Top Entrepreneurs Podcast, host Nathan Latka interviews Andy Tryba, CEO of the $1 billion buyout fund Think3, about acquiring plateaued B2B SaaS companies. Tryba details Think3's debt-free, long-term horizontal operational strategy and explains how cash buyouts empower founders to take a 'second shot on goal' during their prime entrepreneurial years.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 33.4% of the talking time here. How this is scored →
Nathan as informed peer 5.7 Guest teaching 2.7 Guest disagreement 1.3 Nathan pushing back 2.5
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 6:35 Calling out the pivot myth
Tryba dismisses standard startup dogma, calling 'pivot' a cute buzzword for failed ideas and citing data that 90% of unicorns never pivot.
Hardest push from Nathan ▶ 15:18 Pressing on why Think3 avoids post-acquisition debtLatka rejects Tryba's initial brush-off on debt, reiterating how lenders like Hercules could take down equity post-close and questioning why Think3 leaves cheap leverage on the table.
Biggest teaching moment ▶ 5:08 The 15-year founder window thesisTryba reframes founder longevity, explaining why holding onto a mediocre cash-flowing business ruins a founder's career odds compared to taking five discrete shots on goal.
Nathan holds their own ▶ 2:50 Detailed teardown of Bizness Apps metricsLatka demonstrates deep SaaS expertise by rattling off exact historical data point-by-point—$1.5M MRR, $110k capital raised, sub-2% churn, and $500 ARPU.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Introducing Think3 and the Second Shot on Goal | 7 | 2 | 1 | 1 | Latka demonstrates deep domain familiarity by reciting exact historical data from the Bizness Apps founder interview, including MRR, churn rate, and ARPU numbers, which Tryba affirms and builds upon. | |
| ESW Capital Heritage and the Psychology of Founder Exits | 6 | 4 | 3 | 4 | Latka presses Tryba on skepticism from fellow LPs about the fund's size and probes the psychological difficulty founders face giving up cash flow. Tryba responds with a strong reframe debunking startup pivots and outlining a founder's finite 15-year career window. | |
| Differentiating Think3 from Vista Equity and Target Metrics | 6 | 3 | 1 | 2 | Latka brings up local Austin context and compares Think3 to Vista Equity, prompting Tryba to explain their lower-market ARR bracket ($3M–$10M) and minimum 80% gross retention requirement. | |
| Acquisition Operations, Knowledge Transfer, and Team Transitions | 5 | 3 | 1 | 2 | Latka asks about operating logistics and team retention post-sale. Tryba details their 100-day peer knowledge transfer process designed to let founders take their teams if they want. | |
| Andy Tryba's Horizontal CEO Schedule and Time Management | 7 | 3 | 2 | 5 | Latka challenges Tryba twice on capital structure, asking why Think3 does not use post-acquisition venture debt (citing Hercules) to extract cash for new deals. Tryba insists on pure cash equity and 10-to-20-year operational horizons. | |
| The Famous Five Questions with Andy Tryba | 3 | 1 | 0 | 1 | Standard Famous Five closing segment where Tryba shares personal habits, book preferences, and advice to young founders in a friendly tone. |
Statements from this episode (14)
Andy Tryba: Think3 is a $1B fund giving SaaS founders another shot
“Think Three is a billion dollar fund specifically designed to give SaaS founders another chance to get another shot on goal, right?”
Tryba: Cowboy Ventures data shows 90% of unicorn teams worked together previously
“And if you look at a lot of unicorns, for example, something that cowboy ventures did analysis on, you know, they 90% of those teams that actually worked together in the past and the average founder age is actually 34.”
Tryba: ESW Capital has completed 65 deals over the last decade
“We're actually a part of ESW Capital, and ESW Capital, we've done 65 deals over the last decade or so, so we come with a lot of operational experience”
Tryba: Founders have 15 years before lifestyle and family catch up
“Cause you really only have 15 years or so to be a founder. Cause at some point, you know, you're sick of eating ramen noodles and you got kids and all that other good jazz that catches up.”
Tryba: Founders know within three years if a startup will hockey stick
“Within that three, that first three years of you starting the company, you kind of know at that point whether or not that hockey stick's going to occur or whether it's not going to occur.”
Tryba: Cowboy Ventures study found 90% of unicorns never pivoted
“Kind of back towards that same Cowboy Ventures analysis, 90% of those unicorns never pivoted.”
Tryba: Think3 targets SaaS companies with $3M+ ARR and 80%+ retention
“We look for definitely ARR you know, north of, You know, three million, ideally in the five to ten million. And then we also look for a gross retention of at least 80%, and what that simply tells us is you have something that's sticky, right?”
Tryba: Think3 does not require target companies to be growing or profitable
“Now, it doesn't actually have to be growing at some percentage and also doesn't really have to be profitable, because what we really do is we take that team and we use kind of our horizontal core You know competencies to have a shared engineering or share fina…”
Tryba: Think3 buys software companies to run for 10-20 years, not flip
“When we buy these companies, we're not buying it to shine it up, throw some debt on it, and try to go find a buyer. We're buying companies that we feel that we can run for the next decade or two”
Tryba: Think3 lets acquired founders take staff after a 100-day handover
“A part of this Think Three model is actually enabling the founder to take his team with him. Right. Or as much as his team as he would want. Now, obviously, you know, within the first hundred days, we do a pretty extensive knowledge transfer system where we do…”
Tryba stack-ranks priorities and has an assistant enforce exact weekly hours
“I then just stack rank my priority for the quarter, and then I then stack rank my priority for the month, and then I apply percentages of the week that I basically would apply to each one of them, and then I calculate that times the number of hours, and then m…”
Tryba: Horizontal operations enable 50% to 70% net margins in SaaS
“And oftentimes, you know, you can do, you know, anywhere between 50 and 70% net margin a lot of these businesses because of the fact that you're kind of running them horizontal.”
Think3 wins deals by paying cash and closing in 30 days
“And that's one of the, we win a lot of deals because we are all cash and then we close in 30 days, right? I mean, it's a fast cycle. You know, we don't do you know, we don't throw a lot of these guys through these crazy processes and what have you that takes t…”
Tryba: ESW acquired Jive Software for $450M using small debt
“You know, we use a small amount of debts on some of the larger deals within ESW. You know, I think we did Jive software last year for whatever it was, a four hundred and fifty million dollars or whatever. So, so sometimes in those scenarios, we will leverage t…”