Orlando Bravo Warns About VC Firms Piling Into AI Companies

Summary

Orlando Bravo, Thoma Bravo founder and managing partner, said at the World Economic Forum in Davos that venture capital FOMO is driving astronomical valuations for young AI companies, creating mistakes in private markets. He remains bullish on enterprise software, arguing the sector is extremely out of favor with depressed free-cash-flow multiples and that AI will disrupt less than half of software companies, with domain expertise key. He also said software remains a North America business, with the U.S. as the epicenter and trillions of dollars of opportunity, while institutional allocations to the U.S. remain intact.

• Orlando Bravo warns VC firms are piling into AI stories at astronomical private-market valuations.
• He says FOMO is causing mistakes in venture capital and early-stage private markets.
• He is bullish on enterprise software, which he says is extremely out of favor with plummeted FCF multiples.
• He expects AI to disrupt less than half of software companies, especially those with technical core competencies.
• He argues enterprise software success depends on domain expertise, not just technical capability.
• He views software as a North America business with the U.S. as the epicenter and trillions in opportunity.
• He says large institutional investor partners remain steady in the U.S. with allocations intact.
• He says replicating U.S. software scale elsewhere through diversification is difficult.