Episode overview

Tom Waterhouse joins Steve Grace to walk through his career arc: from on-course bookie to startup founder to CEO of a $2.5 billion turnover business to venture fund manager with a 31x return using an option strategy nobody else in the industry was pursuing.

Four generations of bookmaking into online betting

Tom’s great-grandfather, grandfather, and father were all bookmakers. Tom became an on-course bookie straight out of university and grew to become the largest in Australia by age 26, turning over $300 million a year. When the iPhone and 3G arrived, he launched TomWaterhouse.com in 2009 and grew from 100 customers to 250,000 in 18 months. But when global giants entered Australia after advertising restrictions were lifted, he sold to William Hill in 2013.

Running William Hill Australia at 30

William Hill asked Tom to be CEO of their $2.5 billion Australian operation. He had a mentor, Steve Amos (former CEO of ninemsn, Australian head of Apple and Microsoft), who gave him a blueprint for board reporting, cascading priorities to a 500-person team, and establishing a rhythm of business. Tom describes this as the same pattern as his grandfather teaching him bookmaking: you need a blueprint.

The option strategy that returned 31x

After a two-year non-compete, Tom realised the real value was not in gambling operators but in their tech suppliers. William Hill had 500 suppliers in their product roadmap. Nobody knew how to value them. Waterhouse VC buys options to acquire 19.9% of these businesses at early valuations. The first deal went from a $30 million to a $1 billion market cap. The fund has returned 31 times investors’ money, compounded at 100% per annum.