For those down voting me, please go ahead and list all of the YC Companies who have taken money from him. He's supposed to be soooo founder friendly. So why do the best early stage startups avoid him?
For starters....maybe it is as a result of a difference in investment thesis?
The things I have heard him talk about, I can't imagine a YC company doing that. Not saying that they won't, and going forward that may be the case, but I can't recall ever hearing many/any YC company making synthetic beef, or new types of seed, or other stuff that I hear Vinod talking about all the time.
Now don't get me wrong, I am not saying that there are no YC companies that do these things. It's just that based on what I know, if there are any, it is a small subset.
From there, then it is about whether or not the company founders and Khosla Ventures work well together and see the big picture similarly. Not every company that is in an industry you invest in, will be suitable for you to invest in - for a variety of reasons.
So, if we were to be generous, I would say 5% of all YC companies would make up the total "investable pool" for Khosla Ventures. That's only 20 companies. From there....there is no telling why they haven't invested - e.g. all 20 could conflict with existing portfolio companies, or maybe only 15 do and the other 5 are not as impressive as they would like or any other reasons that disqualify them from being investable and reaching a deal with Khosla.
So all in all....if YC were producing 400 of the types of companies that fit Khosla's thesis...then I would agree with you.
But that is clearly not the case....so I don't think that is a useful data point.
His investment thesis is high-growth startups. Funny enough, that's YC too. What you are leaving out is his thesis assumes overwhelming control. That thesis is not in a founder's best interests. It's far better to raise less.
Nice dodge though turning hundreds of startups into tens based on no evidence. And in fact, when you look at his non-cleantech portfolio you can see that almost every YC startup would have a place there, especially the biggies and especially when they just need growth equity now.
The problem is Vinod saw the insane terms he could get in cleantech, while pushing founders aside, and so he anchors to those terms for everyone, including other VCs. The proof is in his lack of big wins, not even from his Kleiner days.
The hostility comes from the large gap between his public persona and what people actually know. That annoys me, yes. He's not a guy that accomplished people actively seek out.
You can judge him solely based on his portfolio. You dont need me for that. And that portfolio is lacking big wins and more importantly, founders who have become really successful.
If that's the best you got, you've proved my point. Square I address below. Vinod gave the best valuation exactly because it was Jack. That's hardly founder friendly when you have no choice.
Jawbone is another fun data point. Yes, he bailed them out when they were going under. But all that did was give Vinod insane positioning. You care to share how much he owns? It's private equity, not VC.
Juniper is a perfect example of Bad Vinod. How long after founding did Pradeep last as CEO? and relative to Kriens, how we'll did he end up?
Lookout I don't know enough to comment on, but it looks like they were smart enough to get a second firm in to keep Vinod from his worst tendencies.
Square will be a $10 B+ outcome. Juniper already is. Lookout, Jawbone and ZocDoc (all Series A leads) are $1 Billion companies. Ring Central is on the precipice of its IPO, etc.
Nice dodge on the questions. I freely admit he does well BT his LPs. The problem is Bad Vinod has consistently screwed with founders. Good Vinod is likely a product of all of those terrible outcomes.
Unfortunately, lack of evidence that he has funded YC Companies is not evidence that hes a bad VC. I'm not saying he isn't, instead, if you could provide proof from various (more than 5) founders that have obtained funding from him and yet feel this way, it might make for a better argument.
I didn't say he's a bad VC. I'm sure his LPs love him.
He's just not who he markets himself as. It's not about you and your company. It's about him.
As for YC, they have what, 400 companies? For a guy who is supposedly (self-proclaimed) so founder friendly, and has $3B in funds, not one big YC company has taken money from him?
Your proof is not how the Valley works, in my view. They know and so they steer clear. That's the glaring proof. Good companies stay away until it's growth equity. Heck, look at Square. They gave Khosla a board seat as part of a huge valuation. He certainly didnt get that company off the ground.
I know of a non-YC company which did take money from Khosla and had a lot of good things to say about them, actually, but I wouldn't generalize from a single data point.
Heh, seriously? I'm sure the valuation he gave Jack has nothing at all to do with it. Jack didnt need Vinod, big difference. Square would be Square without Vinod.
KV asks for less control provisions than other comparable funds. Indeed, we rarely even require a Board seat. Most often, the founder persuades us to accept one.
These "experiments" are normally companies that no other fund on the planet would finance, as they are extraordinarily risky. In those cases, KV does expect greater equity (due to risk and the fact that nobody else will support the company) than a standard seed or Series A. Would you prefer we just decline to fund them like every fund?
With how much liquity floats around today, there's no such thing as too risky. No, Vinod jumps in early exactly to maximize leverage and over the founders and other investors. Why not simply treat them like any other seed? Then leverage over time with pro rata rights? As an angel, did you ever require insane positioning? And angel investing, as you know, is pretty risky. Seriously, two seats, take a step back see that you are justifying a terrible position for founders right out if the box, most especially when they take the options pool from their shares as well. You talk like it's charity when it's robbery, and then of course Vinod's ego runs wild on them.
I note here you keep failing to answer my questions. Bad Vinod is real and it's not just the experiments. With first time founders, the word is to be very careful with KV and many choose to avoid altogether. New founders, less connected in the Valley, are especially vulnerable.
Completely inaccurate. Many of the companies literally cannot be financed by anyone, with the possible exception of Founders Fund. Moreover, it would be an extraordinary case where we would even ask for Board seats like that. In fact, we would more often then not prefer to avoid Board seats entirely. As a technical matter, you cannot increase your ownership % by investing via pro rata rights, just preserve it.
Keith, you are either getting false information from your partners or willfully misleading here. I prefer the former interpretation since I know for a fact this behavior exists at KV and specifically with Vinod leading the push. That's where the Bad Vinod reputation comes from and where people know to stay away.
I have witnessed a sufficient number of pitches in the last six months to opine from my own vantage point. KV invests in many companies that no other VC in the US will invest in. We also support companies that raised money earlier under different circumstances that nobody else will invest in. (I can't address any historical examples without you guiding me to a particular company, etc.)
You do realize that Vinod has been at this for a long time. And his bad reputation is based on that long history. So why make definitive claims based on six months of data?
Moreover, above you justify the insane terms for those founders. You are doing them a disservice on some false belief they can't get funding. If they build something valuable, they will be fundable. Just cause KV jumps in early doesn't entitle KV to be bullies. Vinod has often been a bully. Being early doesn't justify that noxious behavior and his reputation among those who know suffers because of it.
You've already ignored my questions about specific examples.
