The Twenty Minute VC

Orlando Bravo: Raising Kids as a Billionaire; VC vs PE; Is Warren Buffet Wrong? | 20VC #974

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. ------------------------------------ Timestamps: 0:00 Thoma Bravo’s Founding Story 1:53 Mentorship from Thoma 3:31 What does “value investing” mean? 4:23 Orlando’s Other Mentor 5:42 How to turn a company into a free cash flow machine 7:14 What are you running from/towards? 8:38 What to do when you’re plateauing 10:49 Orlando’s Mind-talk 11:36 What does “success” mean to you? 14:20 The State of the Market Today 19:34 How to turn an unprofitable company profitable 25:08 Elon & Twitter 26:04 VC vs PE 29:26 Did Orlando overpay for Anaplan? 31:33 How to think about exits in PE 34:47 Does increased fund size mean decreased performance? 36:13 Is Buffet right about diversification? 37:39 Orlando’s Biggest Miss 40:04 Orlando’s Decision-Making Process 42:52 How to Manage Employee Mindset in an Economic Downturn 44:32 Orlando’s Relationship to Money 46:37 How to instill values in your kids when they grow up rich 49:32 Happiness 51:38 Work-Life Balance 54:07 Orlando’s Favorite Book 55:05 Orlando’s Biggest Fear 55:15 Orlando’s Biggest Strength/Weakness 56:21 What would you tell your younger self? 57:54 Timelines for Life 58:19 Why is philanthropy so hard? 1:00:04 Orlando’s Five Year Plan ------------------------------------ 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? ------------------------------------ Subscribe on Spotify: https://open.spotify.com/show/3j2KMcZTtgTNBKwtZBMHvl?si=85bc9196860e4466 Subscribe on Apple Podcasts: https://podcasts.apple.com/us/podcast/the-twenty-minute-vc-20vc-venture-capital-startup/id958230465 Follow Harry Stebbings on Twitter: https://twitter.com/HarryStebbings Follow Orlando Bravo on Twitter: https://twitter.com/OrlandoBravoTB Follow 20VC on Instagram: https://www.instagram.com/20vc_reels Follow 20VC on TikTok: https://www.tiktok.com/@20vc_tok Visit our Website: https://www.20vc.com ------------------------------------ #OrlandoBravo #ThomaBravo #HarryStebbings #privateequity

Harry StebbingshostOrlando Bravoguest

Feb 5, 20231h 1mWatch on YouTube ↗

WHAT IT’S REALLY ABOUT

Billionaire Orlando Bravo On Pricing, Parenting, And Beating Market Cycles

Orlando Bravo outlines how Thoma Bravo evolved into a software‑only private equity firm by buying undervalued, recurring‑revenue businesses after the dot‑com crash and rigorously focusing on future cash flows. He contrasts PE’s cash‑flow‑driven, price‑sensitive discipline with growth‑at‑any‑price venture investing, explaining how operational playbooks turn great innovators into 40% free‑cash‑flow companies.
Bravo emphasizes the importance of mentors, measurement, and structural change via buyouts to reset incentives, strip out inefficiencies, and align management on profitable growth. He defends paying seemingly high prices for assets like Coupa and Anaplan by pointing out that outsiders don’t see the post‑deal operational plan or targeted margin expansion.
Beyond investing, Bravo speaks candidly about his personal fears (stagnation, feeling trapped), his evolving relationship with money, raising driven children in a wealthy household, and sustaining a marriage while leading a demanding global firm. He also explores why philanthropy is harder than capitalism: there’s only cost, ambiguous impact, and no clear P&L to judge success.

IDEAS WORTH REMEMBERING

5 ideas

In software, long‑term value is driven by future cash flows, not revenue multiples.

Bravo rejects valuing businesses on topline alone; Thoma Bravo underwrites every deal to specific year‑1–5 earnings and cash‑flow targets, adjusting only for cost of capital, not hype.

Operational discipline can turn innovators into 40% free‑cash‑flow machines.

By breaking big problems into measurable components, assigning clear ownership, and restructuring incentives post‑deal, Thoma Bravo systematically drives both high growth and high margins.

Price and downside protection matter far more in PE than in early‑stage VC.

With $10B‑scale equity checks, one large loss can cripple a fund and consume years of partner time, so PE firms must avoid overpaying and cannot “triage away” bad deals the way VCs can.

High‑quality, market‑leading assets justify larger funds—but not over‑diversification.

As software market leaders have grown, Thoma Bravo expanded fund size to buy them, yet deliberately keeps portfolios to ~12–15 companies per fund to stay genuinely hands‑on operationally.

Consensus and proximity to the asset anchor better investment decisions.

Bravo insists that at least a third of the management committee be in the trenches on each deal and requires unanimous support; dissent signals something fundamentally wrong in their focused model.

WORDS WORTH SAVING

5 quotes

We believe every company in the world is worth its future cash flows.

— Orlando Bravo

Any business problem can be solved. Health is another matter.

— Orlando Bravo, quoting mentor Marcel Bernard

Price matters.

— Orlando Bravo

If you have 40 or 50 companies, there is no way you have the time to really change them. Operationally, it’s impossible.

— Orlando Bravo

In capitalism, you are ruled by the P&L… In philanthropy, you only have cost.

— Orlando Bravo

Founding and evolution of Thoma Bravo into a software-only PE firmValue investing in software: cash‑flow focus vs revenue multiplesTurning high‑growth innovators into high‑margin, cash‑generating companiesPricing discipline, fund size, diversification, and downside risk in PEDecision‑making processes, deal selection, and working with management teamsPersonal psychology: fear of stagnation, happiness, and work‑life balanceParenting with wealth and the structural difficulty of effective philanthropy

High quality AI-generated summary created from speaker-labeled transcript.

Get more out of YouTube videos.

High quality summaries for YouTube videos. Accurate transcripts to search & find moments. Powered by ChatGPT & Claude AI.