With the GitLab IPO, Joe Montana prepares the largest venture capital

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On Tuesday, April 30, 2013, Joseph “Joe” Montana, co-founder of iMFL and retired National Football League (NFL) quarterback, spoke during an interview in San Francisco, California, USA.

David Paul Morris | Bloomberg | Getty Images

Joe Montana won his first Super Bowl title in 1982 as an NFL quarterback. Nearly four years later, he is about to conduct his first IPO as a venture capitalist.

Montana led the San Francisco 49ers to four Super Bowl victories and was inducted into the National Football League Hall of Fame in 2000. For the past six years, he has invested in startups through his company Liquid 2 Ventures. He started with a 28 million U.S. dollar fund and is now closing his third fund, almost three times as much.

One of Liquid 2’s first investments was announced in July 2015, when a code repository called GitLab raised $1.5 million in seed funding after passing the Y Combinator incubator program. GitLab was valued at approximately $12 million at the time, and other financing participants included Khosla Ventures and Ashton Kutcher.

On Thursday, GitLab will make its debut on Nasdaq. At a stock price of $69, the market value is close to $10 billion, which is the high end of its range. The initial investment of $100,000 in Montana and some subsequent funds are valued at approximately $42 million at this price.

“We are all very excited,” Montana, 65, said in an interview on vacation in Italy this week. “This will be a monster for us.”

On January 24, 1982, at the Sixteenth Super Bowl at the Silverdome in Pontiac, Michigan, the 16th Joe Montana of the San Francisco 49ers scored against the Cincinnati Bengals. Celebrate after the ball. Niners won the Super Bowl 26-21.

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Although the involvement of famous athletes in start-ups has become a trend in Silicon Valley – from NBA stars Stephen Curry and Andre Iguodala to tennis legend Serena Williams – Montana joined earlier This sport. Prior to Liquid 2, Montana was involved in a company called HRJ, which was founded by former 49ers stars Harris Barton and Ronny Lott.

HRJ invested in other funds rather than directly in the company, closed down in 2009, and was sued for allegedly failing to fulfill its financial commitments.

However, Montana did not return to the sport that made him famous as an executive or broadcaster like many All-Star quarterbacks, but insisted on investing. This time, he took a completely different path.

Persuaded by Ron Conway

The Silicon Valley super angel Ron Conway is known for his big bets on Google, Facebook and Airbnb, and he began to show Montana early investments from around the world, mainly through Y Combinator. Montana participated in Y Combinator Demo Days with more and more seed investors and celebrities, where entrepreneurs showed their company’s slides, which are always growing in the right direction.

“We tried to understand what their secret was, who they fancy, and what they were really looking for in the early company,” Montana said of Conway and his team. “He started taking us there, we started making some investments here and there, and then he persuaded me to start a fund.”

In 2015, Conway invited Montana to participate in the event when talking to the latest batch of founders of the Y Combinator program. There, Montana met GitLab CEO Sid Sijbrandij, a Dutch entrepreneur who turned an open source project that helped developers to collaborate on code into a packaged software and sold it to companies company.

“We got together and said,’Hey, this is a special person,'” Montana said. “We promised that night.”

GitLab just came out of Y Combinator. On the demonstration day in March, Sijbrandij told the audience that his company has 10 employees and 800 contributors working on open source projects. He said that GitLab’s annual sales are expected to reach $1 million, and paying customers include Apple, Cisco, Disney and Microsoft.

GitLab CEO Sid Sijbrandij at the company event in London

GitLab

According to the prospectus, GitLab currently has more than 1,350 employees in more than 65 countries. As it prepares to go public on Thursday, GitLab’s annual revenue exceeds $230 million.Sales in the second quarter increased by 69% to 58.1 million U.S. dollars

However, since GitLab spends three-quarters of its revenue on sales and marketing, the company recorded a net loss of $40.2 million in the most recent quarter. Most of the marketing budget is focused on expanding its DevOps (combination of software development and IT operations) user base.

The company stated in its prospectus: “In order to drive the growth of new customers, we intend to continue to invest in sales and marketing, with a focus on replacing DIY DevOps in large organizations.”

‘Still listening to the pitch’

For Montana, GitLab marked his company’s first IPO, even though he said “we still have 12 or 13 unicorns in our portfolio”, referring to start-ups worth $1 billion or more . These include Anduril, a defense technology company led by Oculus co-founder Palmer Luckey, and Applied Intuition, a self-driving car testing startup.

Montana has three other partners: Mike Miller, who co-founded Cloudant and sold it to IBM; Michael Ma, who sold a startup to Google and became the product manager there; and Joe’s Son Nate Montana (Nate Montana), he previously worked at Twitter.

Montana said he participates in the fund every day and attends partner meetings every Tuesday. He said that his partners are more experienced in technology and are responsible for handling most of the technical due diligence and transaction procurement, while he focuses on helping the portfolio connect with his network.

“Before the pandemic, I was still speaking all over the country,” Montana said, adding that he didn’t start receiving salaries until the third fund. “I talked with companies such as SAP, Amex, Visa and many large companies outside, such as large insurance companies to Burger King.”

In the case of GitLab, Montana said that he had linked Sijbrandij with a senior Visa executive very early when the company was seeking an agreement with a payment processor.

Montana said: “I’m still listening to the stadium, I go to the stadium and do all of this.” “But I’d better take the time now to help these companies connect as they mature.”

watch: Co-founder and CEO of GitLab on the future of work during and after the pandemic

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