Joseph “Joe” Montana, co-founder of iMFL and retired Nationwide Soccer League (NFL) quarterback, speaks throughout an interview in San Francisco, California, U.S. on Tuesday, April 30, 2013.
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Joe Montana gained his first Tremendous Bowl as an NFL quarterback in 1982. Virtually 4 many years later, he is about to get his first IPO as a enterprise capitalist.
Montana, who led the San Francisco 49ers to 4 Tremendous Bowl victories and was inducted into the Nationwide Soccer League Corridor of Fame in 2000, has spent the previous six years investing in start-ups by means of his agency, Liquid 2 Ventures. He began with a $28 million fund, and is now closing his third fund that is virtually thrice greater.
Certainly one of Liquid 2’s first investments was introduced in July 2015, when a code repository referred to as GitLab raised a $1.5 million seed spherical after going by means of the Y Combinator incubator program. GitLab’s valuation on the time was round $12 million, and different members within the financing included Khosla Ventures and Ashton Kutcher.
On Thursday, GitLab is ready to debut on the Nasdaq with a market cap of just about $10 billion, primarily based on a $69 share worth, the excessive finish of its vary. Montana’s preliminary $100,000 funding, together with some follow-on funding, is price about $42 million at that worth.
“We’re all fairly pumped,” Montana, 65, stated in an interview this week, whereas vacationing in Italy. “That is going to be a monster for us.”
Joe Montana #16 of the San Francisco 49ers celebrates after they scored in opposition to the Cincinnati Bengals throughout Tremendous Bowl XVI on January 24, 1982 on the Silverdome in Pontiac, Michigan. The Niners gained the Tremendous Bowl 26 -21.
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Whereas well-known athletes dabbling in start-ups has turn out to be a pattern in Silicon Valley — from NBA stars Stephen Curry and Andre Iguodala to tennis legend Serena Williams — Montana jumped into the sport a lot earlier. Previous to Liquid 2, Montana was concerned with a agency referred to as HRJ, which was based by ex-49ers stars Harris Barton and Ronnie Lott.
HRJ, which invested in different funds slightly than instantly into corporations, collapsed in 2009 and was sued for allegedly failing to fulfill its monetary commitments.
However slightly than return to the game that introduced him fame in an government function or as a broadcaster, like so many fellow all-star quarterbacks, Montana caught with investing. This time he took a lot a unique route.
Satisfied by Ron Conway
Ron Conway, the Silicon Valley tremendous angel recognized for profitable bets on Google, Facebook and Airbnb, started showing Montana around the world of early-stage investing, primarily through Y Combinator. Montana, along with a growing crop of seed investors and celebrities, would attended Y Combinator Demo Days, where entrepreneurs show slides of their companies with growth that’s always up and to the right.
“We were trying to see what their secret sauce was and who they looked at and what they were really looking for in early-stage companies,” Montana said referring to Conway and his team. “He started taking us there, and we started doing a handful of investments here and there, and then he talked me into starting a fund.”
In 2015, Conway was speaking to the latest group of founders in the Y Combinator program, and he invited Montana to attend the event. That’s where Montana met GitLab CEO Sid Sijbrandij, a Dutch entrepreneur who had turned an open-source project for helping developers collaborate on code into a company that was packaging the software and selling it to businesses.
“We got together, and said, ‘hey this is a special guy,'” Montana said. “We committed that night.”
GitLab had just come out of Y Combinator. In his presentation at Demo Day that March, Sijbrandij told the audience that his company had 10 employees along with 800 contributors working on the open-source project. GitLab was on pace for annual sales of $1 million, he said, and paying customers included Apple, Cisco, Disney and Microsoft.
GitLab CEO Sid Sijbrandij at company event in London
GitLab now employs over 1,350 people in more than 65 countries, according to its prospectus. As it prepares to hit the public market on Thursday, GitLab’s annualized revenue is over $230 million. Sales in the second quarter jumped 69% to $58.1 million
However, because GitLab spends the equivalent of three-quarters of its revenue on sales and marketing, the company recorded a net loss of $40.2 million in the latest quarter. Much of the marketing budget is focused on expanding its DevOps (the combination of software development and IT operations) user base.
“To drive new customer growth, we intend to continue investing in sales and marketing, with a focus on replacing DIY DevOps within larger organizations,” the company said in the prospectus.
‘Still listening to pitches’
For Montana, GitLab marks his firm’s first IPO, though he said “we have 12 or 13 more unicorns in the portfolio,” referring to start-ups valued at $1 billion or more. They include Anduril, the defense technology company led by by Oculus co-founder Palmer Luckey, and autonomous vehicle testing start-up Applied Intuition.
Montana has three other partners in the firm: Mike Miller, who co-founded Cloudant and sold it to IBM; Michael Ma, who sold a start-up to Google and became a product manager there; and Nate Montana, Joe’s son, who previously worked at Twitter.
Montana said he’s involved in the fund on a day-to-day basis and attends the partner meetings every Tuesday. He said his partners, who are more experienced in technology, handle much of the technical diligence and sourcing of deals, while he focuses on helping portfolios with connections in his network.
“Until the pandemic, I was still speaking around the country,” Montana said, adding that he didn’t start taking a salary until the third fund. “I was out speaking to companies like SAP, Amex, Visa and a lot of large corporations, like large insurance firms down to Burger King.”
Specific to GitLab, Montana said he connected Sijbrandij early on with a senior executive at Visa, when the company was looking to do a deal with the payment processor.
“I’m still listening to pitches, I go to pitches and do all that,” Montana said. “But my time is better spent now helping with connecting these companies as they mature.”
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