Joe Montana prepares for biggest windfall as a venture capitalist ahead of GitLab’s $10 billion 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.

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Joe Montana gained his first Super Bowl as an NFL quarterback in 1982. Nearly 4 a long time 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 Hall 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 nearly 3 times greater.

One among Liquid 2’s first investments was announced 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 set to debut on the Nasdaq with a market cap of virtually $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 value about $42 million at that worth.

“We’re all fairly pumped,” Montana, 65, mentioned 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.

Focus On Sport | Getty Photographs Sport | Getty Photographs

Whereas well-known athletes dabbling in start-ups has develop into 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 reasonably than immediately into firms, collapsed in 2009 and was sued for allegedly failing to fulfill its monetary commitments.

However reasonably than return to the game that introduced him fame in an government position 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 identified for profitable bets on Google, Facebook and Airbnb, began exhibiting Montana all over the world of early-stage investing, primarily by means of Y Combinator. Montana, together with a rising crop of seed traders and celebrities, would attended Y Combinator Demo Days, the place entrepreneurs present slides of their firms with progress 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 searching for in early-stage firms,” Montana mentioned referring to Conway and his workforce. “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 talking to the newest 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 mission 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 mentioned, ‘hey it is a particular man,'” Montana mentioned. “We dedicated that night time.”

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

GitLab CEO Sid Sijbrandij at firm occasion in London


GitLab now employs over 1,350 folks in additional than 65 international locations, in keeping with 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

Nevertheless, as a result of GitLab spends the equal of three-quarters of its income on gross sales and advertising, the corporate recorded a internet 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 growth and IT operations) person base.

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

‘Nonetheless listening to pitches’

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

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 mentioned he is concerned within the fund on a day-to-day foundation and attends the accomplice conferences each Tuesday. He mentioned his companions, who’re extra skilled in expertise, 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 mentioned, including that he did not begin taking a wage till the third fund. “I used to be out talking to firms like SAP, Amex, Visa and a variety of giant firms, like giant insurance coverage companies right down to Burger King.”

Particular to GitLab, Montana mentioned he related Sijbrandij early on with a senior government at Visa, when the corporate was seeking to do a cope with the cost processor.

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

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