5 Lessons from Orlando Bravo
It’s hard to argue with the results of Thoma Bravo over the last decade.
They’ve become one of the largest private equity firms in the world, they’ve won some of the biggest deals in recent years, and they’ve returned capital to their limited partners (or customers, as they call them) during a time when very few firms are doing so.
Over the weekend, I listened to a recent fireside chat featuring one of the firm’s namesakes, Orlando Bravo, at GSB.
As with all of these stories, I’m sure hindsight and success make them appear better than they felt in the moment, but a few nuggets really stood out to me.
Everyone starts somewhere. Thoma Bravo’s first software buyout deals were $50 million, $75 million, and $250 million enterprise value deals — a far cry from where they are today, doing deals like Jeppesen, which was completed near $11B earlier this year.
Failure is the price of ambition. I’ve heard this line from Bravo several times, but it always makes me think. The first three deals were also complete zeros and, according to Bravo, nearly cost him his job.
Never make the same mistake twice. Carl Thoma — a private equity legend and Bravo’s mentor and partner — taught Orlando that some mistakes are fine, but there are ones you just don’t make, and you never make the same mistake twice. I think this is an important lesson for all investors: you have to get better over time and, as Munger said, know your “circle of competence.”
Stay grounded. This is probably the one that’s hardest to believe but also the most important. Despite all of Thoma Bravo’s success, Bravo says the key is “keeping our feet on the ground” — realizing that in this business everyone is coming for you, and it’s always easy to think you’re too good to learn.
People buy you. Ultimately, we’re all in sales and offer a product that fills a need for someone. That’s true in software, private equity, and just about everything else. However, people don’t just buy a solution — they buy the person they’re working with, too. Life is short, and if you can provide outside of the solution, it pays dividends by creating meaningful relationships.
This was a great watch and a rare interview with Bravo in a more relaxed setting. I highly recommend checking it out if you’re interested in private equity and what it means to build a long-lasting, scaled institution.
