Episode summary
Inside Orlando Bravo’s Private Equity Playbook: How to Build a Top Firm
All-In Podcast
· · Hosts: David Sacks, Jason Calacanis, Chamath Palihapitiya, David Friedberg · Guests: Orlando Bravo
Summary
Orlando Bravo argued that Thoma Bravo’s edge comes from staying small, staying specialized, and buying software businesses with conviction. He said the firm has about 230 people, buys only 10 to 12 companies per fund, and prefers to be outward-facing rather than build a large internal machine. He traced that discipline to mentorship from Carl Thoma and to a strategy that evolved from small deals into larger take-privates as software became more expensive and more competitive.
Bravo described private equity as a change agent built on alignment with investors, but acknowledged the industry’s reputation for cutthroat cost cutting. His view is that software PE is different: the firm underwrites for growth, recurring revenue, and margin expansion, while also watching for AI-driven disruption. He said the biggest challenge now is not just buying businesses, but finding an exit path when Thoma Bravo pays up for assets and must later sell at an even higher multiple or via IPO.
He also walked through the operating playbook after an acquisition: assess the leader, cut costs at closing, improve margins quickly, and then focus on bookings growth and add-ons. On Boeing’s avionics business, he said the deal fit Thoma Bravo’s willingness to pay a fair price quickly for a business it wanted. He closed by saying he believes Puerto Rico would be better off as a state if the US would allow it.
Key takeaways
- Bravo said Thoma Bravo keeps its team around 230 people and buys only 10 to 12 companies per fund to avoid becoming internally focused.
- He argued private equity is a change agent, but said the modern software model is more about growth and recurring revenue than old-school cost cutting.
- Bravo said AI creates a big underwriting risk for software, because many verticals will be disrupted and some areas are too uncertain to touch.
- He said the firm’s playbook is to cut about 15% of costs at closing, then drive profitable growth and add-ons instead of repeatedly revisiting margins.
- Bravo said going public would not help Thoma Bravo’s return profile and that the firm expects to make more money backing the next generation privately.
Notable quotes
“we are very very focused on keeping the team very small. So we have about 230 people at at Toma Bravo within the organization”
“The second thing is I got the benefit, and so did my senior partners of incredible mentorship”
“Private equity has nothing to do with that. Now about 50% of the private equity deal volume is in technology”
“one is there is a big risk of AI in this business I mean in a big big way”
“Going public does not help any of those things for us”
How the episode opens
With one of the best track records in private equity, Bravo manages 179 billion in assets, Bravo has grown at a blistering pace. Last year, the firm returned over $13 billion to investors. In 2019, Orlando became the first Puerto Rico born billionaire.
Private equity firms, the good ones, definitely beat the public markets. We are in the business of turning great innovators into great businesses. Ladies and gentlemen, please welcome Toma Bravo's Orlando Bravo.
See you. Thanks for coming. How are you, David?
Good to see you. For those that don't know, let me just do a a couple of data points and then we'll just jump into the story because Orlando has an in Wait, are we are we seriously going to ignore whatever virtue signaling JL is doing over here? What what's this uh virtue signal you got going?
What are you doing right now? Well, this isn't virtue. This is um my bestie Tulsi gave me an official scarf from her office for my wife and I stole it from my wife.
So, I'm wearing it. And I know you probably didn't see it yesterday, but Jason was run over by the director of national intelligence, Tulsy Gabbard, yesterday. He was so tilted.
She was walking through the Russia hoax. He was so tilted he had his phone googling and grocking trying to get and and all he could come up with is this. And literally in this tone, what about Paul Maniffort?
And nobody knew what that meant. Nobody knows who he is, including her.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- private equity playbook
- thoma bravo operating strategy
- fundraising and mentorship
- ai risk underwriting
- deal pricing and acquisitions
Companies and tickers mentioned
- BA
- Thoma Bravo
- Boeing
Watch the episode
Watch “Inside Orlando Bravo’s Private Equity Playbook: How to Build a Top Firm” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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