This podcast is for informational purposes only and does not constitute an advertisement. Views expressed are those of the individuals and not necessarily the views of Thoma Bravo or its affiliates. Thoma Bravo funds generally hold interest in the companies discussed. This podcast should not be construed as an offer to solicit the purchase of any interest in Thoma Bravo fund.
AIR DATE: April 18, 2024
Transcript
DISCLAIMER:
This podcast is for informational purposes only and does not constitute an advertisement. Views expressed are those of the individuals and not necessarily the views of Thoma Bravo or its affiliates. Thoma Bravo funds generally hold interest in the company's discussed. This podcast should not be considered as an offer to solicit the purchase of any interest in any Thoma Bravo fund.
ORLANDO BRAVO:
Hi, I am Orlando Bravo, co-founder and managing partner of Thoma Bravo, and this is Beyond the Deal, a special bonus episode of Thoma Bravo's Behind the Deal. And I'm here with co-founder Carl Thoma. Carl, I got to ask you so many questions in our last episode, and you mentioned that you had something for me, so here's your turn. Go for it.
CARL THOMA:
We've talked a lot about investment performance, but could you talk to me a little bit about what motivated you to really focus on culture as an equal part of that investment performance?
ORLANDO BRAVO:
That's a big question. You're really going at the personal level now, Carl. You remember that time when I went through a big change in my life, I was going through a personal change, and you were in the San Francisco office and you told me, "Given these changes, it's very important that your partners know about it first so that they don't hear from anybody else." And I was like, "Wow, that's what partnership is about, and we're a tight group here together." Subsequent to that, I wanted to spend a lot of time with my kids, which it takes time out of work from doing that, so I had to prioritize. And the priority were the kids at the time, so it forced me to delegate to my partners. I couldn't be in every management meeting like I was before. I couldn't be in every single mini decision.
And what ended up happening is the more I delegated, the better the business got, the better my partners were. Like right now, you and I know this, but Scott, Seth, Holden, I can tell you that each one of them is the best private equity professional in the world. Single-handedly. And maybe that wouldn't have happened if you delegated and I delegated for maybe other reasons. I also think, look, marrying Katie had a lot to do with it. I got engaged to her in 2012 and maybe it's no accident that the business took off, really, since then. She calls me out, she's very thoughtful, puts me in my place, and having a very powerful good partner has you become more grounded and thoughtful, also. I really also think that that was a big, big factor. And third, maybe Carl, it's just maturity of going through things that allows you to think a bit bigger.
CARL THOMA:
The Thoma Bravo team and all of our investors are very fortunate for your transition, because building a successful private equity firm is very hard work and that's in some ways is Stan Goler, my mentor, would often say, at the end of the day, what he's most proud of is building a lasting organization and your transition in leadership style and culture is one of the proudest moments of my life. And if you think about it in the scheme of things, it was pretty darn significant.
ORLANDO BRAVO:
Thanks for saying that. You set it all up. It's like we've spoken about before. We joked, about when you hired me, I wanted a little bit of carry and that wasn't in the cards, and I thought, "That's pretty scary. Maybe if I do well, maybe the economics won't be there." I didn't know you. I knew your awesome reputation, but we had never worked together and had never worked for you before. And it wasn't that you would not be appreciative of that. It was that I first needed to show performance. And then when I did, you overdid it, and you allowed me to continue on with my partners and continue building this with you. And look where we are now. A lot of the things that we're doing now, you put in place. Focus on relationships, partnership, performance, and stay humble. You always talk about that when you talk to our groups. Stay really humble and keep working hard on what you know.
CARL THOMA:
We still have a bright future ahead of us because we've built a culture that is proven to evolve and will continue to evolve, and we're being very careful about getting the right people on our team so that 20 years from now, when you're my age, you can be sitting here and being interviewed by the next generation of leadership.
ORLANDO BRAVO:
That would be the highlight for me. It always made me really proud and my partners, when we were doing a deal, to do it better because we were together with you. When we started in software, we did industry consolidation in software. Prophet 21, we rolled up the industry. There were a couple of other people doing that and they were doing that well also, but we're like, "We come from a better school and we're going to do it better." And a lot of those firms that were doing well back then are not in the space anymore. Some of them are not around. They did fine for a period of time, but our industry has changed. It was licensed software, now software-to-service. We've gone into infrastructure, into cyber. Now AI is incredibly interesting, and it's probably highly beneficial to the space, but it's what you spoke about. You were able to go from industry consolidation in other types of sectors to software because it's a process and it's a culture. It's not something you can really copy.
CARL THOMA:
I agree.
ORLANDO BRAVO:
Thanks so much for joining us on Beyond the Deal. Really, really have enjoyed talking to you and I'm sure the listeners will get a lot out of it, as well.
CARL THOMA:
Thank you. No, it was fun. We're all guilty of focusing on tomorrow. So often we don't step back and think about the past too often, so this was fun. I feel like we've got a good foundation in place for great things still to come.
ORLANDO BRAVO:
One of the things is you've always been an amazing motivator. You had the ability and have the ability of taking very complex things and saying it in one sentence or two. Super brief, humble. And today, I'm more fired up to go back to work, so thanks for talking to me today.
CARL THOMA:
Good.
DISCLAIMER:
The executives were not compensated in connection with their participation, although they generally received compensation in connection with their roles and in certain cases, are also owners of Thoma Bravo portfolio company Securities and or investors in Thoma Bravo funds. Such compensation and investments subject participants to potential conflicts of interest.
