Orlando Bravo

I think it's a great change agent.

It's a business in a way similar to venture where what matters is the returns that you put up and you have incredible alignment with the sources of capital.

they give you the money, and if you make the return, you can stay in business, and if they give you the money and you don't make the return, no matter how big we may be, we slowly lose that and we're out of business.

And that alignment is so important because you're such a big change agent to companies.

These software companies are not meant to be owned by the same group for 30 or 40 years.

Management gets tired, it's exhausting to run, it's exhausting to be a CRO, and the more they trade hands, you have somebody with maybe a new idea,

and maybe a perspective that was right for the company at that time.

And that buyer, like private equity, can assume and be super entrepreneurial and try to do something special.

That is 100% fair in the 80s, 90s, and maybe early 2000s.

Private equity has nothing to do with that now.

About 50% of the private equity deal volume is in technology.

We do that, we're very narrow, we only do software.

If you look at any software deal we've done in the last 12, 13 years, after SaaS became irreversible in 05, you're paying seven to eight times revenue, and the financing on seven to eight times revenue is maybe two turns of revenue.

So you're putting in five to six turns of equity in the company, 30% debt, 70% equity.

If you're not building and growing that business, especially if it's big, nobody's gonna buy it from you.

It used to be that for those old school deals, if you look at the return, two-thirds of the return will come today from the cash flow of the business, from your yield, and a little bit in the terminal value.

It's flipped.

About two-thirds or more is terminal value appreciation, and you make very little.

So you're a growth investor.

On your yield.