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With one of the best track records in
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private equity,
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Bravo manages 179 billion in assets,
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Bravo has grown at a blistering pace.
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Last year, the firm returned over $13
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billion to investors. In 2019, Orlando
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became the first Puerto Rico born
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billionaire. Private equity firms, the
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good ones, definitely beat the public
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markets. We are in the business of
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turning great innovators
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into great businesses.
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Ladies and gentlemen, please welcome
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Toma Bravo's Orlando Bravo.
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[Music]
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[Applause]
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[Music]
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See you. Thanks for coming. How are you,
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David? Good to see you. For those that
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don't know, let me just do a a couple of
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data points and then we'll just jump
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into the story because Orlando has an in
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Wait, are we are we seriously going to
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ignore whatever virtue signaling JL is
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doing over here? What
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what's this uh virtue signal you got
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going?
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What are you doing right now?
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Well, this isn't virtue. This is um my
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bestie Tulsi gave me an official scarf
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from her office
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for my wife and I stole it from my wife.
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So, I'm wearing it. And
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I know you probably didn't see it
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yesterday, but Jason was run over by the
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director of national intelligence, Tulsy
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Gabbard, yesterday. He was so tilted.
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She was walking through the Russia hoax.
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He was so tilted he had his phone
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googling and grocking trying to get and
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and all he could come up with is this.
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And literally in this tone, what about
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Paul Maniffort? And nobody knew what
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that meant. Nobody knows who he is,
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including her.
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Okay, so your mother why you got to beat
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up on Jason so much you should be a
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nicer to him he is your bestie sorry
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continue Orlando has an incredibly
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inspiring story but let me just set the
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backdrop of what uh Toma Bravo is to
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Bravo started in 2008 so what is that 17
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years now and now has just a little
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under 200 billion which is incredible
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but here are the two stats that stunned
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me in June you raised $34.4 4 billion in
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basically like a set of fund vehicles
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which is I want to understand how that
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is even possible and then you basically
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have owned now or 500 companies and many
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of the big software companies that you
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know we probably interact with and have
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to deal with. But before we get into all
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those details, I think what's inspiring
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is you are a child of Puerto Rico, a
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small town in Puerto Rico, and I've
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texted you this before, but I just
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wanted you to tell everybody, how does a
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guy, and I'm not I'm saying this in a
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nice way, from literally the middle of
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nowhere,
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get here? How does that happen?
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Your parents, your family, like how does
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that happen?
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Well, by the way, thanks so much for
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having me. And I'm not sure how we're
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supposed to talk about serious stuff and
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private equity when when when we have
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this, but
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you persevere.
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I I got this. Look, um that touches my
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heart that you asked that question
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because when Hurricane Maria hit Puerto
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Rico,
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kind of everything stopped for me
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because my best friends are there, my
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family's there, um cousins, my my whole
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upbringing.
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I got there on a plane the day after.
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And where were you at the time? I was in
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San Francisco.
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Okay.
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And we had gotten a message from Puerto
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Rico saying there's some shelters,
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particularly one that was really close
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to my hometown of my that had only two
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days supply of food and water. And there
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were all these kids and everything else.
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And the government of Puerto Rico, they
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had they had trouble serving these
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towns. So we said, "We'll go from San
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Francisco and bring you a bunch of food
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and water and we'll we'll be there
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tomorrow." And they actually showed up.
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When I landed, three of my friends that
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I hadn't seen in a while, my best high
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school friends, one of them asked me,
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"Oh, now you're doing all this business
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stuff. How did that happen?" And I said,
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"Well, the odds are one of us had to get
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lucky out of out of everybody here, one
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I mean that there's there's some odds to
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that."
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But was that something like your parents
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gave you where they're like, "You have
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to go, you have to do something or
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Yes. Now, at every turn, I tell you
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this, how exactly I got here. I've never
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created anything new, but I always had
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my mom who was a Cuban immigrant. And
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for her, just me staying there, it
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didn't feel right to her. She was
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always, you know, she would put me in
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positions where I would always have to
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be traveling to San Juan to play tennis,
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the sport of tennis individual. Then if
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I did well, I remember I played my first
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tournament when I was 10 years old in
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Karacas, Venezuela. And I saw wealth
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back then, Karakas, Venezuela in 1982
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was quite a place and you played in this
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fancy club and then you if I do really
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well, I get to play in Florida. So she
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was always always kind of giving me a
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road map for that. I was lucky that I
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wasn't that good to go pro. So I went so
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so that I went into business. But then
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the same thing at at work, you know, I
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had the two best mentors and the only
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thing I give myself credit for is at a
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young age I really listened. I had
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discipline and I would kind of kind of
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take it all in.
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You were also the beneficiary of an
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incredible mentor. And there's these
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great stories. Yesterday we heard, you
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know, Vlad tried to get a job at Climate
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Corp. Couldn't started Robin Hood. You
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know, famously, um, my HR lead at
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Facebook introduced me to her then
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boyfriend Ben Sberman. We interviewed
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Ben. We ended up not hiring him. He
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immediately started Pinterest. And when
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you graduated from Stanford, you only
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got one job offer from like a
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threeperson firm basically. Do you want
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to tell us about that story?
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Yeah, I would you know at 1997
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there was not not much private equity
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and the venture business you didn't hire
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a lot of people. It was also it was also
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small. Now I I want to add this to the
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story. I had I got one interview with
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one of the largest private equity firms
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at the time and the head of the firm
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spent time with me. Very very nice guy.
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But you know what he said and this is
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1997.
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There's not much opportunity in our
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industry anymore and the industry is
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taken.
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Now our firm is multiples bigger
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than they are. And the same thing will
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happen in the future for the few of you
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that may be interested in private
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equity. you'll come by and create a firm
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and it the American spirit and
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entrepreneurialism and being at the
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right place at the right time because we
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started doing software and it's hard not
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to do well if you started doing software
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back then and had all this uh this wind
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behind your back. So, I didn't I
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couldn't get a job. There weren't many.
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And then Carl Toma hired me. And at the
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end of the process, this is interesting.
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There were a few private equity firms
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that kind of opened up a position for me
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to do Latin American private equity. And
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I'm like, "No, I've I've spent too much
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time in the south. The money's in the
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north. I I you know, I want to do US
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buyout tech. That's what I wanted to
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do." And Carl was great. He said, "If
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you want to do tech, that's not
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something we do, but you know, start
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looking at it and and we'll we'll help
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you."
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And so, so just tell us about how the
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decisions you've made now to build this
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business. How many people do you have?
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How do you run 200 billion effectively?
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How do you raise 34 how do you what do
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you tell people to raise 34 billion? I
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don't I don't even I don't even
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comprehend that.
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I think you do. Come on.
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You guys have done pretty well. I
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appreciate that. But but it's uh okay.
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So we have we are very very focused on
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keeping the team very small. So we have
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about 230 people at at Toma Bravo within
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the organization.
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Um the the reason is you if if you have
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too big of a team, you become internally
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focused and start dreaming about
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conversations internally. And as I
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always say, the deal's not in the
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office, the company's not in the office,
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and the buyer of your company's not in
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the office. So, you always have to be
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outward facing. The second thing is I
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got the benefit, and so did my senior
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partners of incredible mentorship. I can
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tell you so many stories about Carl Toma
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spending time with me in 1998 on the
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deal we were going to lose. And I would
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be like, why did you spend all that time
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with the CEO and me on his kitchen
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table? He wanted to teach me how to
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sell. He wanted to teach me how to do a
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deal. and and that was just incredible.
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So if we have too many of those, we
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can't we can't touch the next generation
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leadership. So that is that is part of
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our philosophy. Now how do we raise that
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money? Look, our first deal, it's always
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been one step at a time. Our first deal
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was 50 million. The second deal was 100
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million enterprise value. The third was
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data at 250 million. We didn't buy a
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company in Silicon Valley till 2010. Uh
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that was Sonic Wall that we paid 550
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million in take private. That was our
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first foray into real cyber um in in
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higher growth uh businesses. So one
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little step at a time. There was a time
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that we couldn't raise a billion dollars
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but now we have enough of a following
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that you know people people
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what is the role of private equity in
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the US economy do you think what is the
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role that it should play? I think it's a
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great change agent.
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It's it's a business in a way similar to
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venture where what matters is the
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returns that you put up and you have
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incredible alignment with the sources of
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capital. They give you the money and if
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you make the return, you can stay in
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business. And if they give you the money
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and you don't make the return, no matter
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how big we may be, we slowly lose that
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and and we're out of business. And and
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that that alignment is so important
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because you're such a big change agent
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to companies. These software companies
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are not meant to be owned by the same
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group for 30 or 40 years. Management
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gets tired. It's exhausting to run. It's
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exhausting to be a CRO. And the more
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they trade hands. You have somebody with
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maybe a new idea, maybe a perspective,
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and maybe a perspective that was right
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for the company at that time. And that
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buyer like private equity can assume be
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super entrepreneurial and try to do
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something special. So Orlando though the
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the just building on that it clearly has
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alignment with the investors but maybe
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you could talk a little bit about the
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broader alignment with society jobs the
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reputation of PE sometimes is a bit too
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cutthroat and if you hear oh a PE a firm
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bought my favorite brand or our firm got
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bought by you know our startup got
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bought by a P firm it's like okay
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they're going to cut half the people and
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there's going to be layoffs or maybe
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this brand is going to get saddled with
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debt and absolutely gutted for parts. So
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what's fair or unfair about that sort of
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PR crisis? Maybe there is with PR with
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with PE.
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That is 100% fair in the 80s, 90s, and
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maybe early 2000s.
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Private equity has nothing to do with
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that. Now about 50% of the private
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equity deal volume is in technology. We
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we do that. We're we we're very narrow.
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We only do software. If you look at any
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software deal we've done in the last 12
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13 years after SAS became irreversible
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in '05
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you're paying 7 to8 times revenue and
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the financing on 7 to8 times revenue is
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maybe two turns of revenue so you're
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putting in five to six turns of equity
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in the company 30% debt 70% equity if
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you're not building and growing that
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business especially if it's big nobody's
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going to buy it from you it used to be
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that for those old school deals if you
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look at the return twothirds of the
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return will come today from the cash
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flow of the business from your yield and
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a little bit in the terminal value. It's
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flipped about 2/3 or more is terminal
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value appreciation and you make very
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little. So you're a growth investor on
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your yield. We really are we had to
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transfer to that because look the the
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lucky thing we had was after I
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personally made a lot of mistakes 97 to
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the internet bubble bursting. Carl Toma
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was going to fire me and this is also
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true. He he talked about it in his 70th
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birthday and and he gave me another
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chance and I said, "Okay, I'm not good
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at what we were doing then. I'm gonna go
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for existing management,
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really established companies and
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software." In 2000, you could buy
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recurring revenue and software cheaper
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than in all the other categories that
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private equity liked. Think about radio,
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uh, cable, whatever. Rec outdoor
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advertising, anything. So, the
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partnership said, "Sure, let's try it.
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Let's try with something small. At that
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time, you could buy cheap. But what
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happened is in 2010
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after the financial crisis, most of our
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competitors that were doing those deals
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and it was heavily competitive then for
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these smaller transactions, they left
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the business because now software became
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super expensive.
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So there's a but we said chamat but then
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we said oh instead of complaining that
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we cannot do what we were doing before
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because everything changes. Now we have
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the wherewithal to buy the best and the
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number one. So let's go for the number
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one player that can grow.
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So you started doing a lot of these SAS
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deals in 2010. When you sit there with
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your partners in 2025,
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is there a risk of SAS
00:13:04
being cannibalized from within by AI or
00:13:07
you know how it can just be rebuilt in
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different ways? How do you underwrite it
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today which is different from how you
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may would have underwritten it in 2010?
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Our investors don't love to hear this
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because for right our investors
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especially the large institutions that's
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kind of our market that those are our
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our our people that have backed us for a
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long time besides good returns they need
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consistency
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and predictability they would rather
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have us do what we were doing in 2002 in
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these deals and why why can't you just
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keep doing the same thing and it all
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changes one is there is a big risk of AI
00:13:46
in this business I mean in a big big way
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there's so many verticals that are going
00:13:50
to get disrupted there's so many areas
00:13:52
that are very confusing and you don't
00:13:54
want to touch so it limits the space
00:13:57
significantly even if you believe what
00:13:59
we believe which is in the enterprise
00:14:01
it's going to take a while because we
00:14:03
always say technology is evolutionary
00:14:05
not revolutionary because our customers
00:14:07
are buying this stuff for cost they want
00:14:10
the ROI and you need to see the plan and
00:14:12
everything else but one is there's a big
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disruption and that's and other all
00:14:15
these areas we don't get into. Um, and
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we have to keep learning um and and
00:14:20
updating ourselves. That's that's a lot
00:14:22
of of work that the young people in the
00:14:24
firm as well will have to do. But we
00:14:26
have another equally big or even bigger
00:14:29
challenge which is if you look at our
00:14:31
trajectory, it's not like one day we
00:14:33
woke up and said, "Oh, we can do a $10
00:14:35
billion deal." No, we we started 50 that
00:14:39
trajectory in 2010. We did three billion
00:14:42
dollar deals in a row. Um we bought blue
00:14:44
code we took it private. DelTech we took
00:14:46
private we bought digital insight from
00:14:48
into it. When those worked then we did a
00:14:50
$2 and half billion dollar deal that
00:14:52
became Dinatrace that was compare. Then
00:14:54
when that worked we did a $5 half
00:14:55
billion dollar deal which Dina was here
00:14:58
yesterday. That was the business that we
00:15:00
sold to NASDAQ and that worked. But now
00:15:02
we're doing $10 billion deals. We have
00:15:05
to sell those for 25 to make money.
00:15:07
Wow. our our alternative here, what we
00:15:10
have to underwrite is an IPO at a big
00:15:13
discount to the comps when we paid a 30%
00:15:16
premium to the comps to buy that company
00:15:18
in the first place. So, we kind of start
00:15:20
50% in the hole. Well,
00:15:22
to do that. So, you have to Anyway,
00:15:24
I wanted to ask you this question
00:15:25
because I I asked a friend of mine about
00:15:26
you and he was competing with you to get
00:15:29
the Boeing business and you you bought
00:15:31
the Boeing avionics business recently
00:15:33
for 10.5 billion, which I think all of
00:15:35
us care about because hopefully it'll
00:15:37
improve flight safety and all of that
00:15:38
other stuff, but we can talk about that
00:15:39
in one second. But he said Orlando's
00:15:42
incredibly difficult to compete with
00:15:43
because they're so he's so ready to buy
00:15:46
the thing he wants to buy and he doesn't
00:15:49
really, you know, nickel and dime at the
00:15:52
edges. It's like, let's find a fair
00:15:53
price and we'll just transact and it
00:15:55
makes it very hard for everybody else to
00:15:56
compete with. When you get that
00:15:57
conviction, are you just willing to just
00:16:00
basically put that much money on the
00:16:01
line and say, "We're going to figure
00:16:02
this out."
00:16:03
We are.
00:16:04
That's sort of Warren Buffett's
00:16:05
mentality, isn't it? That he he already
00:16:07
knows all the companies. is he knows
00:16:08
which ones he wants to buy and when they
00:16:10
come up that he doesn't nickel and dime
00:16:13
he just quickly works out a deal. Is
00:16:14
that something is that a mentality that
00:16:16
you have?
00:16:17
100%. It all it all fits together with
00:16:19
having a small team. We also have a
00:16:21
small portfolio. So in every fund we'll
00:16:24
buy 10 to 12 companies.
00:16:26
We we strive for the two core
00:16:29
competencies that we try to have. One is
00:16:32
buy the best and operate the best and
00:16:35
just focus on that in a 3 to four year
00:16:38
time frame for our funds for investing
00:16:40
our funds. We cannot say with a straight
00:16:42
face that there are 30 of the greatest
00:16:45
companies that were available to be
00:16:46
bought at that time.
00:16:48
Right?
00:16:48
So, so that's why and two we cannot say
00:16:51
with a straight face that we can try to
00:16:53
influence management with everything we
00:16:55
learned from an incredible mentor if we
00:16:57
had a portfolio of 30. That's as much as
00:16:59
as we can handle. So, we have to go for
00:17:01
it. Now, I do want to add that what I
00:17:04
love about the private equity business,
00:17:06
one of the items is that those deals
00:17:09
because the decisions that you make with
00:17:11
your partners an hour before the bid is
00:17:15
is really really important. It's really
00:17:17
telling.
00:17:18
Well, can you take us behind the TikTok
00:17:19
of this Boeing asset? It's I think it's
00:17:21
like a it touches all of us even if most
00:17:23
of us don't understand that it even
00:17:24
existed actually. Well, it it basically
00:17:27
runs maybe you cannot fly an airplane,
00:17:30
right, without Jeepposin and and its
00:17:32
system. And the way the deal started,
00:17:35
uh, we called the the CEO of Boeing,
00:17:38
actually sent him an email saying, "Hey,
00:17:40
we could buy this division and we're
00:17:42
paying these these good prices." So,
00:17:45
there was some interest. The process
00:17:46
started and there were about 15 private
00:17:48
equity groups, all excellent groups
00:17:49
involved in the deal.
00:17:51
But, why would Boeing want to sell its
00:17:53
avionics business? I guess maybe start
00:17:55
with that like
00:17:56
Yeah, it seems pretty core. It's a good
00:17:58
business and I I I'm happy that they
00:18:00
decided that.
00:18:01
So, you're saying that was a bad
00:18:04
decision to sell a cockpit?
00:18:08
We'll take it.
00:18:09
Fair enough. Um I I wanted to ask you a
00:18:12
question about
00:18:13
Can we get the answer to that though?
00:18:14
What what what is the strategic rational
00:18:16
for Boeing to want to sell its avionics
00:18:18
business? Is the idea that other plane
00:18:20
manufacturers can then use that avionic
00:18:22
system? I'll give my answer and maybe
00:18:24
you can.
00:18:25
I think Boeing is in this incredibly
00:18:26
difficult position where there's a lot
00:18:29
of diffuse things that were happening
00:18:30
inside of the business
00:18:32
and they had to make a real
00:18:35
rationalization. What are the few things
00:18:36
we can be good at? So, you know, one of
00:18:38
our friends, Brian Utko, was put in
00:18:40
charge of new plane development. I think
00:18:43
you know, you can guess what's going to
00:18:44
happen there. That's a clear strategic
00:18:46
bet. You know, getting the 737 or this
00:18:49
the max program back online. That was a
00:18:51
clear bet. But when you do that, you
00:18:54
have all kinds of debt and stuff that
00:18:56
you just need to clean out. And
00:18:58
sometimes you have to sell. And by the
00:19:00
way, you are right. Your instincts are
00:19:02
right because my friends who called me
00:19:04
basically said this is the gem asset
00:19:07
inside of Boeing. I mean, he's being
00:19:08
very gracious by not you. So yeah, but
00:19:11
Jeepson is the thing that everybody
00:19:13
uses. United, Delta, everybody needs
00:19:15
this information to fly accurately. And
00:19:17
it was Boeing's business and now it's
00:19:18
Orlando's business.
00:19:19
Okay. So
00:19:20
what's our phone's business? I wish it
00:19:21
was like
00:19:23
it's your Orlando. We um we don't buy
00:19:26
stuff. We're generally year zero, year
00:19:28
one, two investors who help build
00:19:30
things, but Sax and I got to watch our
00:19:32
friend Elon buy Twitter and um that was
00:19:35
quite eye opening. It was also the first
00:19:37
thing that I think he ever bought in in
00:19:39
you know a major way like that. What is
00:19:42
the playbook for coming into one of
00:19:44
these technology companies and you have
00:19:48
like you said tired management maybe the
00:19:50
people who are still saying at this
00:19:52
company are the ones who couldn't find
00:19:53
other work or maybe weren't as
00:19:55
ambitious. What's it like day zero, day
00:19:58
one, day two when you get in there?
00:20:00
What's the playbook? What's you know
00:20:01
one, two, three, we got to do these
00:20:03
things in the first 30 days.
00:20:05
It's almost always the same. We we try
00:20:08
to buy companies and Jefferson is a a
00:20:11
tweener in that because their margins
00:20:13
were about 25%. But we feel that
00:20:15
business can be running like a Denza
00:20:17
that we sold to NASDAQ for 50% plus
00:20:19
running it like a software company and
00:20:21
making the right investments.
00:20:23
The the playbook is this. You meet with
00:20:25
a company uh usually a public company
00:20:28
that trades for a revenue multiple
00:20:30
because they're not that profitable.
00:20:33
And our our mentality is we try to turn
00:20:35
what we call a good innovator into a
00:20:37
good business. We have all these
00:20:39
meetings with management and after we
00:20:40
listen a lot to them, we come back to
00:20:42
them and we have we put together a plan
00:20:45
with them to cut cost. So there is that
00:20:47
element because you have to get in the
00:20:49
game with a certain level of fundamental
00:20:51
earnings to be able to afford the deal.
00:20:53
You you you basically are what we're
00:20:55
trying to do is turn a revenue multiple
00:20:57
day one, say we buy it for six or seven
00:20:59
times to an ebida multiple in day four.
00:21:02
If that company grew 20% and you achieve
00:21:04
a 50% margin, you've done that. And then
00:21:07
you say, "What are the comps? What is
00:21:08
this thing worth? Is it a 20p a 25p?" A
00:21:12
20p is about 15 times ebida. You could
00:21:13
double your asset value without the
00:21:16
benefit of that 30% leverage which you
00:21:18
pay down a bit and that's how you create
00:21:19
your return. So you you talk we talk to
00:21:22
management very openly during the
00:21:24
process even before we won the deal even
00:21:27
if they're not going to like us etc. and
00:21:29
we say, "Hey, can we put together a plan
00:21:32
where you can make the right investment
00:21:33
decisions, but can you cut 15% of the
00:21:36
cost of the company at closing?" The
00:21:39
deal in private equity, talk about the
00:21:41
change agent. If you don't do that at
00:21:42
closing in private equity, why are you
00:21:45
going to shock the employees afterwards?
00:21:47
Your 2, three, four, the deal, since
00:21:49
everybody's thinking there's a new owner
00:21:51
that's going to provide change, gives
00:21:53
you the opportunity for immediate
00:21:54
change. Now, as my mentor Marcel Bernard
00:21:57
used to say, he was the greatest
00:21:58
operator I've ever met. 35 years at
00:22:00
Motorola running different divisions and
00:22:02
that was an exceptional school of
00:22:04
management. No matter how profitable you
00:22:06
are, you can always cut 10%. No matter
00:22:08
how unprofitable you are, it's difficult
00:22:11
to cut more than 20%. Because you have
00:22:13
to change the way people make decisions,
00:22:14
the way management interacts, etc.
00:22:17
How do you evaluate the talent stack?
00:22:19
That was something that actually David
00:22:21
was exceptional at during the Twitter
00:22:23
acquisition. And we sat there in a room
00:22:25
and he said, "Well, who's exceptional at
00:22:28
their job?" And then Elon said, "And
00:22:31
who's absolutely critical for this
00:22:33
business?" And I just walked up to the
00:22:34
whiteboard and I drew four quadrants,
00:22:36
exceptional, essential. And then there
00:22:39
was this sort of exceptional but not
00:22:42
essential. And we we we then had a
00:22:44
clear Elon proved that you could cut 85%
00:22:47
of Twitter and it would still work just
00:22:49
fine.
00:22:49
And all the journalists were like,
00:22:51
"Twitter's going to go down any day
00:22:52
now." And then they were like every day
00:22:55
they would write the same story. Twitter
00:22:57
went down and be like, "Oh no, you lost
00:22:58
your internet connection on your phone
00:23:01
and they'd be like,"No, it's it's not
00:23:03
coming up." And it's like, "Yeah, yeah,
00:23:05
reut the P Wi-Fi password in." And it
00:23:07
never went down. It it was pretty crazy.
00:23:10
But how do you assess talent when you're
00:23:12
coming into one of these legacy
00:23:15
businesses, you know, 10 years, 20 years
00:23:17
into the business?
00:23:18
History tells you a lot of that. So you
00:23:20
you're trying to identify
00:23:23
not everybody's good at everything and
00:23:25
it starts with a leader. If the leader
00:23:27
is good, everything is good. If the
00:23:29
leader is not good, nothing is good. You
00:23:31
you don't want to work around them to
00:23:33
deal with sales and product and stuff
00:23:34
because the nothing is going on. Now
00:23:37
what does a good leader mean, right?
00:23:39
There's so many judgments that come in.
00:23:41
Are they is a company hitting bookings?
00:23:42
Is it missing? Are they good at customer
00:23:44
service? What's their retention? How do
00:23:45
they make decisions? What we look for
00:23:48
overall because nobody's perfect is to
00:23:50
back what they're look what they're good
00:23:52
at. We love to do add-on acquisitions
00:23:54
for our company. So the reason we like
00:23:56
to take out the cost once is the rest is
00:23:58
about bookings growth and add-ons. We
00:23:59
don't want to revisit margin too much.
00:24:01
We want profitable growth going forward.
00:24:03
Let's be done with that and then let's
00:24:04
go forward. The leader can stand up in
00:24:06
front of the entire employee base and
00:24:08
said we needed to do this. This deal
00:24:10
probably gave us the courage to do what
00:24:11
we need to do. Let's go. Let's go build
00:24:13
the business. So, but we we look at a
00:24:15
leader and we say if they're
00:24:17
open-minded,
00:24:18
if they care about numbers and if they
00:24:21
have the following of their employees
00:24:22
and customers and really know the
00:24:24
business, that is something that we
00:24:26
really, really, really try to work with.
00:24:28
With all the changes we make, we've been
00:24:29
pretty contrarian in the industry
00:24:31
because we first try to make them with
00:24:32
the existing people. And sometimes, you
00:24:34
know, we make a mistake on that and they
00:24:36
change their mind, but we we try to do
00:24:37
that.
00:24:38
Before you do a deal, what's the secret
00:24:40
to figuring out how good the asset is?
00:24:43
Do you go talk to customers, backdoor
00:24:45
references? Do you go find the employees
00:24:47
who quit and started companies and
00:24:49
interview them? Like, there's got to be
00:24:50
some tricks to assess a company before
00:24:53
you even let them know you're interested
00:24:54
in them. What are those tricks?
00:24:56
All of that. All of that. Now, we've
00:24:59
usually owned a competitor or a partner
00:25:02
to the company as well
00:25:04
and and we've usually known him for a
00:25:06
long time. Like we recently announced
00:25:08
that we were doing the Day Force deal
00:25:09
for 12 billion. My partner Holden Spade
00:25:13
met with the CEO of Day Force in 2008
00:25:15
and we've tracked that company for so
00:25:17
long watching it when does it miss when
00:25:20
does it hit its numbers and everything
00:25:22
else. It's um
00:25:25
you get you also once you sign them up
00:25:28
uh or are in a process where the
00:25:30
company's giving you all their raw data,
00:25:32
you have so much information to make
00:25:34
those choices. Like for example, a
00:25:36
company cannot say that it has really
00:25:39
really good product if its gross margins
00:25:42
on support are very low.
00:25:45
And we can bring technology people to
00:25:46
assess that and we have that on our team
00:25:48
and they look at the architecture and
00:25:49
the the talent and everything else. But
00:25:51
then you go how come your support calls
00:25:53
are so high?
00:25:54
It's a bad product. It
00:25:55
yeah it it it all fits together. If you
00:25:57
have great retention,
00:25:59
great margins on support. It's like for
00:26:01
example take support. Many people look
00:26:03
to offshore support and now maybe AI
00:26:07
would would get on on that and there's
00:26:08
no need for that. What we say is
00:26:11
eliminate the reason for the call alto
00:26:12
together
00:26:13
because there's nothing you can do in
00:26:14
product. So we're evaluating all that.
00:26:16
We love it. We geek out over it.
00:26:18
There's a handful of PE firms obviously
00:26:19
that are now lynch pins of the capital
00:26:21
markets. Blackstone, Apollo, KKR,
00:26:25
Carlile, they're public, they are
00:26:28
multistrat. They're huge pillars. And I
00:26:31
mean, you've built an incredible
00:26:32
business. You have the credibility to do
00:26:34
it. Is there an impetus to do it? Is
00:26:37
there an impetus to kind of grow beyond
00:26:38
that technology focus? And if not, how
00:26:41
do you stay in your knitting? Because
00:26:44
it, you know, how do you do that? How
00:26:46
where does the discipline come from?
00:26:47
Look, I I think um
00:26:51
we are very pure to our investor base
00:26:54
and our colleagues, the two of them at
00:26:56
the same time. What I say matters to
00:26:58
them is the return.
00:27:01
So what matters for us to grow the
00:27:03
business is get the money, get the deal,
00:27:05
improve the deal. Going public does not
00:27:08
help any of those things for us. That
00:27:11
that's that's number one. Two is we're
00:27:14
really I'm just so grateful. I I really
00:27:17
really am for my mentors. I mean, Carl
00:27:20
Toma gave me and my partners the
00:27:21
company,
00:27:22
right?
00:27:22
And he mentored us. So, we want to do
00:27:24
the same thing for the next generation.
00:27:26
And we actually feel we'll make more
00:27:28
money by investing behind the next
00:27:29
generation when that time comes than by
00:27:31
going public and having a great day and
00:27:34
a great multiple and and then what? So,
00:27:36
so far we're just going to we're just
00:27:38
going to stay where we are.
00:27:39
As we wrap, I I just want to ask you a
00:27:41
question about Puerto Rico again, where
00:27:43
we started. You're the first Puerto
00:27:45
Rican billionaire. I understand it's um
00:27:48
it's just a number obviously, but should
00:27:50
Puerto Rico become the 51st state? You
00:27:53
know, we we have Trump talking about
00:27:54
Greenland, whatever. Um you know, we
00:27:57
have these ambitions. The people of
00:27:58
Puerto Rico seem to want to have a
00:28:01
deeper relationship with America. It
00:28:03
seems profoundly unfair that they're in
00:28:04
this, you know, sort of middle state.
00:28:07
Yeah. It's such a divided place. The
00:28:10
turnouts in elections in Puerto Rico
00:28:13
when I was a kid used to be like 90%.
00:28:15
It's a whole festival in the island when
00:28:18
elections happen between the party that
00:28:19
wants the status quo and the party that
00:28:21
wants statehood. Now, the party that
00:28:23
wants statehood has grown quite a bit
00:28:25
and some of the tax incentives of being
00:28:27
um kind of in this Commonwealth status
00:28:29
have gone away. I'm going to say
00:28:31
something I've never said before and I I
00:28:34
do believe it'll be better for Puerto
00:28:35
Rico to be a state if the US would allow
00:28:37
that.
00:28:37
I'm for it. I'm here for it. Ladies and
00:28:40
gentlemen, Orlando Bravo.
00:28:43
Thanks, man.
00:28:44
Wow. Thank you. Incredible, huh? I'll
00:28:46
talk to you soon.
00:28:48
Great job. Thank you. Amazing.
