Salesforce exec predicts reckoning in overvalued venture market

John Samorjai, Salesforce Chief Corporate Development and Investments Officer, argues that current venture capital valuations are unsustainable and that a market reckoning is inevitable. He notes that while generational companies like Anthropic, SpaceX, and OpenAI justify massive valuations, many other startups are commanding $10 billion-plus valuations without the potential to grow into them. Samorjai points out that the buyer universe for companies above $10 billion is extremely small, with fewer than 1% of companies going public, making exit opportunities critical. He criticizes the focus on Annual Recurring Revenue as a sole metric, noting it masks high customer attrition, which is a major red flag in due diligence. Salesforce has invested in over 750 companies and acquired 29, including a $1 billion AI fund launched in early 2023. Samorjai argues that the VC community is acting irresponsibly by funding mediocre companies at generational valuations, creating a bubble that will burst because these companies cannot sustain their growth or attract acquirers.