Salesforce Rises in Benioff's Shadow to Become a Force in Venture Capital

Looking for up-and-coming startups is a competitive business in Silicon Valley, but it becomes much harder when one of the field’s highest-profile practitioners is your boss.

That's the position John Somorjai, head of venture investing at Salesforce.com Inc., finds himself in. He answers to Salesforce Chief Executive Officer Marc Benioff, who has become one of the most-active investors in early-stage technology businesses -- independently of the enterprise-software company he runs.

The arrangement has the potential for clashes, and corporate venture capital investing has a reputation for lackluster returns. But so far Somorjai and Benioff have made it work. After seven years of making investments on behalf of Salesforce, its venture arm owns stakes in 11 startups worth $1 billion or more, according to venture-capital tracker CB Insights.

"Their returns should be outstanding over the next several years," said Byron Deeter of Bessemer Venture Partners, which co-invests frequently with Salesforce Ventures. He attributes their success to an aggressive commitment to companies that, like Salesforce, work in cloud-based software, a new generation of applications accessed over the internet rather than on premises. Most small cloud startups want to team up with bigger companies in the field like Salesforce, Deeter added.