In a recent ION Influencers Fireside Chat hosted by Giovanni Amodeo, Adam Solomon, Partner at Thoma Bravo and co-lead of Thoma Bravo’s Explore fund, shared his perspective on identifying high-impact opportunities in digital transformation, the evolving role of AI, and Thoma Bravo’s unwavering focus on software investing. The conversation unpacked how specialization, data leverage, and long-term vision are crucial in today’s rapidly shifting tech and capital markets landscape.

Key Topics Discussed:

1. Thoma Bravo’s Explore Fund Strategy

• Focused on lower mid-market software buyouts.

• Targets control deals in enterprise software with established product-market fit.

• Emphasis on long-term digital transformation potential.

2. Why Sector Focus Matters in Software Investing

• Deep specialization enables better pattern recognition.

• Helps avoid overpaying in overhyped sectors.

• Builds conviction through historical deal experience (500+ software investments).

3. Digital Transformation as an Investment Thesis

• Focus on large, traditional sectors (e.g., fintech, healthcare, edtech, industrial tech).

• Look for “mission-critical” software with hard ROI and operational embedment.

• Seeks opportunities to automate, optimize, and innovate customer workflows.

4. Evaluating Product Importance & ROI

• Key customer diligence questions: “Can you run your business without this software?”

• Hard ROI (3x–10x) vs. Soft ROI (e.g., risk mitigation in cybersecurity).

• Avoids nice-to-haves in favor of deeply integrated platforms.

5. Value Creation & Operational Playbook

• Rapid post-deal execution with full board control.

• Focus on growth acceleration, margin improvement, and strategic M&A.

• Deep pre-deal alignment with management on P&L vision.

6. Backing Founders & Management Teams

• Prefer to back existing leadership, often first-time founders.

• Look for self-awareness and openness to collaboration.

• Pair founder insight with Thoma Bravo’s operational expertise.

7. AI Integration Across Portfolio

• Investing in IP and use cases across operations and product.

• Leverages proprietary data and customer relationships to build competitive AI products.

• Identifies both threats and opportunities from AI disruption.

8. Exit Strategy & Investor Expectations

• Builds exit optionality from day one (strategic buyers, PE, public markets).

• Rejects hype investing; prioritizes durability, not trendiness.

• Transparent communication with management teams to ensure alignment.

9. Investor Trends: Specialization Over Diversification

• Increasing LP demand for sector-specific strategies.

• Recognized link between domain focus and consistent returns.

10. Market Concerns & Future Outlook

• AI’s existential threat to some software models.

• More scrutiny on operational efficiency post-COVID hiring booms.

• Growing interest in continuation vehicles—though Thoma Bravo remains traditional in exits.

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