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 National Football 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. Almost 4 many years later, he is about to get his first IPO as a venture capitalist.

Montana, who led the San Francisco 49ers to 4 Super Bowl victories and was inducted into the National Football League Hall of Fame in 2000, has spent the previous six years investing in start-ups by way of his agency, Liquid 2 Ventures. He began with a $28 million fund, and is now closing his third fund that is virtually thrice larger.

One of 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 way of the Y Combinator incubator program. GitLab’s valuation on the time was round $12 million, and different contributors 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 value, 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 value.

“We’re all fairly pumped,” Montana, 65, mentioned in an interview this week, whereas vacationing in Italy. “This goes to be a monster for us.”

Joe Montana #16 of the San Francisco 49ers celebrates after they scored towards the Cincinnati Bengals throughout Super Bowl XVI on January 24, 1982 on the Silverdome in Pontiac, Michigan. The Niners gained the Super Bowl 26 -21.

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While well-known athletes dabbling in start-ups has change into 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. Prior 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 fairly than instantly into firms, collapsed in 2009 and was sued for allegedly failing to satisfy its monetary commitments.

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

Convinced by Ron Conway

Ron Conway, the Silicon Valley tremendous angel identified for profitable bets on Google, Facebook and Airbnb, began displaying Montana all over the world of early-stage investing, primarily by way 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 appropriate.

“We had been attempting to see what their secret sauce was and who they checked out and what they had been actually wanting for in early-stage firms,” Montana mentioned referring to Conway and his group. “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 most recent group of founders within the Y Combinator program, and he invited Montana to attend the occasion. That’s 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 a firm that was packaging the software program and promoting it to companies.

“We obtained collectively, and mentioned, ‘hey that 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 workers together with 800 contributors engaged on the open-source undertaking. GitLab was on tempo for annual gross sales of $1 million, he mentioned, and paying clients 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 nations, in line with its prospectus. As it prepares to hit the general public market on Thursday, GitLab’s annualized income is over $230 million. Sales within the second quarter jumped 69% to $58.1 million

However, as a result of GitLab spends the equal of three-quarters of its income on gross sales and advertising and marketing, the corporate recorded a web loss of $40.2 million within the newest quarter. Much of the advertising and marketing price range is concentrated on increasing its DevOps (the mixture of software program improvement and IT operations) consumer base.

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

‘Still listening to pitches’

For Montana, GitLab marks his agency’s first IPO, although he mentioned “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 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 bought it to IBM; Michael Ma, who bought 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.

“Until 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 lot of giant firms, like giant insurance coverage corporations all the way down to Burger King.”

Specific to GitLab, Montana mentioned he related Sijbrandij early on with a senior govt at Visa, when the corporate was seeking to do a take care of the fee processor.

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

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