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Joe Montana prepares for biggest venture win as GitLab goes IPO


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.

David Paul Morris | Bloomberg | Getty Pictures

Joe Montana received his first Tremendous Bowl as an NFL quarterback in 1982. Nearly 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 his agency, Liquid 2 Ventures. He began with a $28 million fund, and is now closing his third fund that is nearly 3 times larger.

One among Liquid 2’s first investments was introduced in July 2015, when a code repository known as GitLab raised a $1.5 million seed spherical after going by the Y Combinator incubator program. GitLab’s valuation on the time was round $12 million, and different individuals within the financing included Khosla Ventures and Ashton Kutcher.

On Thursday, GitLab is about to debut on the Nasdaq with a market cap of just about $10 billion, primarily based on a $69 share value, the excessive finish of its vary. Montana’s preliminary $100,000 funding, together with some follow-on funding, is value about $42 million at that value.

“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 received the Tremendous Bowl 26 -21.

Focus On Sport | Getty Pictures Sport | Getty Pictures

Whereas well-known athletes dabbling in start-ups has grow to be a development 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 known as HRJ, which was based by ex-49ers stars Harris Barton and Ronnie Lott.

HRJ, which invested in different funds somewhat than immediately into firms, collapsed in 2009 and was sued for allegedly failing to fulfill its monetary commitments.

However somewhat than return to the game that introduced him fame in an govt function or as a broadcaster, like so many fellow all-star quarterbacks, Montana caught with investing. This time he took a lot a distinct route.

Satisfied by Ron Conway

Ron Conway, the Silicon Valley tremendous angel recognized for profitable bets on Google, Fb and Airbnb, began displaying Montana around the globe of early-stage investing, primarily by Y Combinator. Montana, together with a rising crop of seed buyers and celebrities, would attended Y Combinator Demo Days, the place entrepreneurs present slides of their firms with development that is at all times up and to the correct.

“We have been attempting to see what their secret sauce was and who they checked out and what they have been actually on the lookout for in early-stage firms,” Montana stated referring to Conway and his staff. “He began taking us there, and we began doing a handful of investments right here and there, after which he talked me into beginning a fund.”

In 2015, Conway was chatting with the most recent group of founders within the Y Combinator program, and he invited Montana to attend the occasion. That is the place Montana met GitLab CEO Sid Sijbrandij, a Dutch entrepreneur who had turned an open-source undertaking for serving to builders collaborate on code into an organization that was packaging the software program and promoting it to companies.

“We received collectively, and stated, ‘hey it is a particular man,'” Montana stated. “We dedicated that night time.”

GitLab had simply come out of Y Combinator. In his presentation at Demo Day that March, Sijbrandij instructed the viewers that his firm had 10 workers together with 800 contributors engaged on the open-source undertaking. GitLab was on tempo for annual gross sales of $1 million, he stated, and paying prospects included Apple, Cisco, Disney and Microsoft.

GitLab CEO Sid Sijbrandij at firm occasion in London

GitLab

GitLab now employs over 1,350 folks in additional than 65 nations, in response to its prospectus. Because it prepares to hit the general public market on Thursday, GitLab’s annualized income is over $230 million. Gross sales within the second quarter jumped 69% to $58.1 million

Nonetheless, as a result of GitLab spends the equal of three-quarters of its income on gross sales and advertising, the corporate recorded a web lack of $40.2 million within the newest quarter. A lot of the advertising finances is targeted on increasing its DevOps (the mix of software program improvement and IT operations) person base.

“To drive new buyer development, we intend to proceed investing in gross sales and advertising, with a give attention to changing DIY DevOps inside bigger organizations,” the corporate stated within the prospectus.

‘Nonetheless listening to pitches’

For Montana, GitLab marks his agency’s first IPO, although he stated “we have now 12 or 13 extra unicorns within the portfolio,” referring to start-ups valued at $1 billion or extra. They embrace Anduril, the protection know-how firm led by by Oculus co-founder Palmer Luckey, and autonomous car testing start-up Utilized Instinct.

Montana has three different companions within the agency: Mike Miller, who co-founded Cloudant and offered it to IBM; Michael Ma, who offered a start-up to Google and have become a product supervisor there; and Nate Montana, Joe’s son, who beforehand labored at Twitter.

Montana stated he is concerned within the fund on a day-to-day foundation and attends the companion conferences each Tuesday. He stated his companions, who’re extra skilled in know-how, deal with a lot of the technical diligence and sourcing of offers, whereas he focuses on serving to portfolios with connections in his community.

“Till the pandemic, I used to be nonetheless talking across the nation,” Montana stated, including that he did not begin taking a wage till the third fund. “I used to be out chatting with firms like SAP, Amex, Visa and a number of giant firms, like giant insurance coverage companies right down to Burger King.”

Particular to GitLab, Montana stated he linked Sijbrandij early on with a senior govt at Visa, when the corporate was trying to do a take care of the fee processor.

“I am nonetheless listening to pitches, I’m going to pitches and do all that,” Montana stated. “However my time is best spent now serving to with connecting these firms as they mature.”

WATCH: GitLab co-founder and CEO on the way forward for work throughout and after the pandemic



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