How Orlando Bravo Built One of the Most Successful Firms in Private Equity
In this episode of All-In, Orlando Bravo shares his path from playing tennis in Puerto Rico to building one of the largest private equity firms in the world. The discussion traces how early experiences and mentorship shaped his career trajectory, leading him from initial rejections in private equity to founding Thoma Bravo, a firm that raised a $34.4 billion fund in 2022.
Bravo explains his firm's investment approach, which focuses on selecting a small number of high-performing companies, particularly in the software sector. He discusses how private equity has evolved beyond financial engineering to emphasize growth and innovation, with firms now operating more like venture capitalists and considering their broader impact on employees, customers, and communities.
This is a preview of the Shortform summary of the Oct 15, 2025 episode of the All-In with Chamath, Jason, Sacks & Friedberg
Sign up for Shortform to access the whole episode summary along with additional materials like counterarguments and context.
1-Page Summary
Orlando Bravo's Background and Path to Success
Orlando Bravo's journey began on the tennis courts of Puerto Rico, shaped by his mother's strategic guidance. As a Cuban immigrant, she encouraged him to travel for tennis competitions, first to San Juan, then to Venezuela and Florida. While tennis didn't become his career, these early experiences laid the foundation for his future success in business.
After graduating from Stanford, Bravo faced initial rejection in private equity but found his path through mentorship from Carl Toma, who directed him toward the tech industry. This guidance proved crucial as the software sector boomed. Now leading Toma Bravo, Orlando focuses on passing forward this legacy of mentorship, choosing to concentrate on U.S. buyout tech rather than Latin American private equity.
Thoma Bravo's Investment Strategy and Growth
Thoma Bravo has developed a distinctive approach to private equity, focusing on quality over quantity. According to Bravo, the firm typically invests in just 10-12 companies per fund, targeting top-performing businesses. Their success is evident in their ability to raise substantial capital, including a $34.4 billion fund in 2022, and execute major deals like the $10.5 billion Boeing avionics acquisition.
The firm's investment strategy has evolved to embrace technology, particularly in software deals. These investments typically involve a 30% debt to 70% equity ratio, with valuations at seven to eight times revenue. Bravo notes that the firm is actively working to master AI and its associated risks, carefully selecting tech verticals for future-proof investments.
Evolving Role of Private Equity in US Economy
The private equity landscape has shifted significantly, moving beyond financial engineering to focus on driving growth and innovation. Bravo explains that modern private equity firms now act more like venture capitalists, steering companies through transformative changes that catalyze growth.
According to Bravo, today's private equity firms have broadened their focus beyond pure profit, considering their impact on employees, customers, and communities. This represents a significant evolution from traditional private equity practices, emphasizing value creation that benefits both investors and society at large.
1-Page Summary
Additional Materials
Clarifications
- Orlando Bravo's early experiences in tennis, guided by his mother, involved traveling for competitions in various locations like San Juan, Venezuela, and Florida. While tennis wasn't his ultimate career path, these experiences laid the groundwork for his future success in business. His mother, a Cuban immigrant, played a pivotal role in shaping his journey through the sport, instilling valuable lessons and strategic guidance. These early travels for tennis tournaments exposed Bravo to diverse environments and challenges, contributing to his development and resilience.
- Orlando Bravo initially faced rejection in private equity but found success in the tech industry with mentorship from Carl Toma. Toma guided Bravo towards the tech sector, which was experiencing significant growth at the time. This mentorship was pivotal in shaping Bravo's career trajectory and ultimately led him to establish Thoma Bravo, a successful private equity firm specializing in tech investments.
- Thoma Bravo's investment strategy involves a 30% debt to 70% equity ratio, indicating the mix of borrowed funds and investor capital used for acquisitions. Valuations at seven to eight times revenue suggest the multiples at which Thoma Bravo assesses the worth of target companies based on their annual sales. This approach helps the firm determine the financial health and growth potential of potential investments in the software sector.
- Private equity firms are increasingly adopting a venture capitalist approach by actively engaging in the growth and transformation of the companies they invest in. This shift involves providing strategic guidance and operational support to drive innovation and expansion. Additionally, modern private equity firms are focusing on creating value beyond financial returns, considering the impact of their investments on various stakeholders such as employees, customers, and communities. This evolution signifies a departure from the traditional profit-centric model towards a more holistic approach that emphasizes sustainable growth and societal benefits.
Get access to the context and additional materials
Orlando Bravo's Background and Path to Success
Orlando Bravo's journey from tennis courts in Puerto Rico to the pinnacle of private equity is marked by his mother's guidance and the power of mentorship. His background and path to success illustrate the profound impact of seizing opportunities and cultivating entrepreneurial spirit.
Orlando Bravo's Start in Puerto Rico and Mother's Guidance
Orlando Bravo's Puerto Rican Upbringing and Mother's Encouragement Led Him To Success Through Tennis
Orlando Bravo's trajectory was heavily influenced by his Puerto Rican upbringing and the roadmap laid out by his mother, a Cuban immigrant. She was determined not to have her son stay put and arranged for him to travel to places like San Juan to play tennis. Bravo's performances in tennis opened doors for him to compete in places like Caracas, Venezuela, and then in Florida. Despite tennis not leading to a professional career, this exposure provided Bravo with the foundational experience to venture into the business world.
Bravo's Private Equity Struggle and Career-Shaping Mentorship
Rejected by Private Equity, Bravo Pivoted to Software With Mentor's Help and Found Success
After graduating from Stanford, Bravo faced a closed-off private equity industry, which was small and not hiring many people at the time. He recalls being explicitly told that the industry was "taken" during an interview with a large private equity firm. Still, Bravo persevered and was eventually mentored by Carl Toma who steered him towards the tech industry, despite it not being the firm's focus. Being at the right place at the right moment, Bravo rode the wave of the booming software sector, which contributed significantly to his success.
Bravo's Entrepreneurial Spirit and Focus On Mentorship
Bravo Credits Success to Mentorship, Emulates With Small, Focused T ...
Here’s what you’ll find in our full summary
Orlando Bravo's Background and Path to Success
Additional Materials
Actionables
- Reflect on your upbringing to identify unique strengths and perspectives you can bring to your professional life. Just as Bravo's Puerto Rican roots played a role in his success, consider how your own background has equipped you with certain skills or viewpoints that could be advantageous in your career. For example, if you grew up in a multicultural household, you might have a natural ability for cross-cultural communication that could be beneficial in international business settings.
- Seek out a mentor in an area you're passionate about, even if it's outside your current field of expertise. Bravo benefited from mentorship when transitioning to the software industry, so look for someone who excels in an area you're interested in and ask for guidance on how to pivot your career path. You could find potential mentors through professional networking sites, industry forums, or local business events, and propose a short-term project or a series of informational interviews to learn from their experience.
- Make strat ...
Get access to the context and additional materials
Thoma Bravo's Investment Strategy and Growth
Thoma Bravo has carved out a distinctive niche in the private equity space with a focus on tech and software investments. The firm has honed its approach to leverage the new technological landscape, resulting in prolific capital-raising capabilities and the execution of large-scale deals.
Thoma Bravo's Approach to Private Equity
Orlando Bravo, discussing Thoma Bravo's investment strategy, emphasizes a commitment to excellence over quantity.
Thoma Bravo Focuses On 10-12 Investments per Fund, Aiming For Excellence Instead Of a Broad Portfolio
Thoma Bravo centers its efforts on a select few investments per fund, typically 10 to 12 companies, focusing on the top-performing businesses. Orlando Bravo justifies this strategy articulating that finding and significantly impacting 30 of the greatest companies within the usual three-to-four-year funds is not feasible.
Thoma Bravo's Capital-Raising and Large-Scale Transaction Execution Prowess
Thoma Bravo demonstrates its tremendous capability to raise capital and execute substantial transactions.
Thoma Bravo Excels in Capital Raising, Including a $34.4 Billion Fund in 2022, and Executing Large Deals Like the $10.5 Billion Boeing Avionics Acquisition
The firm raised a staggering $34.4 billion in June, through a suite of fund vehicles. Orlando Bravo describes Thoma Bravo's evolution in scaling deal sizes, leading to high-profile acquisitions. The firm's recent purchase of Boeing's avionics business for $10.5 billion exemplifies its capacity to close monumental deals.
Thoma Bravo's Tech Adaptation
Thoma Bravo is leading the charge in marrying technology with investment strategies.
Thoma Bravo Pivots to Focus On Software and Tech, Leveraging AI for Outsized Returns
Private equity has pivoted towards technology, with Thoma Bravo focusing exclusively on software deals. Financing structures for software-focused deals usually involve lower leverage, underscoring the importance of a company's growth and appreciation in terminal value for investment returns. Bravo r ...
Here’s what you’ll find in our full summary
Thoma Bravo's Investment Strategy and Growth
Additional Materials
Clarifications
- Thoma Bravo focuses on making a limited number of high-quality investments per fund, typically around 10 to 12 companies, prioritizing top-performing businesses. This strategy allows them to concentrate their efforts on companies with significant growth potential. By emphasizing excellence over quantity, Thoma Bravo aims to have a substantial impact on a select group of companies within each fund.
- Thoma Bravo's capital-raising prowess is highlighted by their ability to secure significant funds, like the $34.4 billion raised in 2022. This financial strength enables them to execute large deals, such as the $10.5 billion acquisition of Boeing's avionics business. Their success in raising substantial capital and closing monumental transactions showcases their financial acumen and market influence.
- Thoma Bravo's pivot towards focusing exclusively on software deals and leveraging AI for returns signifies a strategic shift towards investing in technology-driven companies to capitalize on their growth potential and innovation. By concentrating on software investments, Thoma Bravo aims to benefit from the increasing importance of technology in various industries and the potential for high returns in this sector. Leveraging AI in investment strategies allows Thoma Bravo to enhance decision-making processes, identify lucrative opportunities, and manage risks effectively in the rapidly evolving tech landscape. This strategic adaptation showcases Thoma Bravo's forward-think ...
Related Shortform Content
Get access to the context and additional materials
Evolving Role of Private Equity in Us Economy
The landscape in which private equity operates is undergoing a significant transformation, with a heightened focus on growth, innovation, and societal impact rather than merely engineering financial returns.
Private Equity Shifts From Engineering to Value Creation
Private Equity Shifts to Growth and Innovation Focus
In recent times, private equity firms have shifted their focus toward driving growth and fostering innovation within their portfolio companies. This evolution in strategy comes as traditional sources of return—mainly stemming from business cash flow—have taken a backseat to terminal value appreciation. Such a shift indicates that fostering growth within the business itself has become a critical component of a successful private equity strategy.
Private Equity's Role in Business Transitions and Growth
Orlando Bravo, a prominent figure in the world of private equity, points to the industry’s emerging role as a change agent, similar to that of venture capital. The idea he posits is that, much like venture capitalists, private equity firms today aim to steer companies through transitions that catalyze growth and inject fresh perspectives and entrepreneurial spirit. This is evident in how Thoma Bravo, a leading private equity firm, has had to pivot into a role that emphasizes growth investing, especially in the dynamic domain of software investments.
Private Equity Firms Like Thoma Bravo Drive Growth and Change, Boosting the Economy
In Bravo's view, the enduring success of private equity firms hinges on creating tangible value that aligns with capital sources. This not only propels the firms forward but also has a rippl ...
Here’s what you’ll find in our full summary
Evolving Role of Private Equity in Us Economy
Additional Materials
Clarifications
- Private equity firms, like venture capital, are increasingly seen as change agents because they actively drive transitions within companies to stimulate growth and introduce new perspectives. This shift in focus involves private equity firms taking on a more proactive role in shaping the strategic direction and operational efficiency of the businesses they invest in. By leveraging their expertise and resources, private equity firms aim to accelerate growth and enhance the overall performance of their portfolio companies, similar to how venture capitalists support startups in achieving rapid expansion and market success. This evolving role signifies a departure from the traditional perception of private equity solely as financial engineers, highlighting a broader emphasis on value creation and long-term sustainability in the companies they manage.
- Thoma Bravo, a prominent private equity firm, shifted its focus towards growth investing in software companies. This strategic pivot involved directing more investments and resources into software businesses to drive growth and innovation within this sector. By emphasizing growth investing in software, Thoma Bravo aimed to capitalize on the opportunities presented by the dynamic nature of the software industry. This move reflects a broader trend in the private equity landscape where firms are increasingly prioritizing sectors with high growth potential, such as technology and software.
- Creating tangible value aligned with capital sources in private equity involves generating measurable benefits wi ...
Counterarguments
- While private equity firms may emphasize growth and innovation, the primary goal remains to maximize returns for investors, which can sometimes lead to cost-cutting measures that negatively affect employees and other stakeholders.
- The shift towards growth and innovation may not be uniform across the industry, with some firms continuing to focus on traditional leveraged buyouts and financial engineering.
- The claim that private equity boosts the economy could be contested by pointing out instances where leveraged buyouts have led to job losses or company bankruptcies.
- The alignment of private equity with societal interests may be more of a public relations strategy than a fundamental change in business practices.
- The impact on employees, customers, and communities might not always be positive, especially in cases where private equity firms prioritize short-term gains over long-term stability and growth.
- The idea that private equity firms are now similar to venture capitalists could be challenged by noting the differences in risk profiles, investment stages, and the nature of involvement in portfolio companies.
- The assertion that private equity creates tangible value could be ...
Get access to the context and additional materials
Create Summaries for anything on the web
Download the Shortform Chrome extension for your browser
