The vibes seem off

Being at this conference the past week, I couldn’t help but notice that the vibes just seemed off among a large subset of investors. Not everyone of course, but the majority of investors that I spoke to had similar views into what’s happening right now.

The thing that I kept hearing was “the company is growing like crazy, but I just don’t know how this all shakes out”.

It’s a similar feeling to the one I’ve been having. We’ve never seen companies grow like this before this age of AI. Companies that are 1-4 years old are generating hundreds of millions of revenue and setting unprecedented growth rates. It seems like every other week a company claims “we’re the fastest growing X to get to $100M of revenue”.

That’s all great, but there’s a general uneasiness with what’s happening. Call exploratory revenue. Call it double revenue as lots of these companies are reselling inference. Whatever is happening right now is making a lot of investors uncomfortable and thinking that this won’t last forever.

Of course, there’s a lot of money in VC and they’re not foolish capital allocators so perhaps this is different. But especially among the public company investor pool, there is a general feeling that this is all being marked up way too high and the sentiment amongst the few that I spoke to was that they want no part of these IPOs at these valuations.