Khosla Ventures

“Raised On like a memo from coastal adventures and active in capital. And then some of my, some friends and people I know that I raised from before their seed funds. Three million dollars roughly. Beginning of 2024. So I'd say like February, March.”

“So we're building agents internally usually, and we only have like half a developer that Basically help us scale. So we're building an internal AI lawyer a couple of AI associates some other sort of AI accounting functionality. And these are agents that are au…”

“He asked you to, like, draw a twenty-thirty picture of your company, and I think he just picks And plus five years. Whatever. I don't know. I did the same to you. Yeah. He asks you to like walk that back from first principles all the way from today. And he ask…”

“We have a KV. We invested in a sovereign AI company in Japan called Sakano.”

“So I think if you're going to reinvent an industry, you don't want experts.”

“So when people join the team at KV, we don't actually look at their output. Like, Are the companies great? We look at the quality of their questions.”

“There were only two venture capital funds raised in all of 2009. It was us and a new couple of ventures fund, and Benoad, of course, was one of the legends of venture capital, so he was able to do that, but we were the only other literally venture fund raised …”

“He basically said businesses that should be venture backed will always have an incentive to raise more and grow faster. He said, my hot take is that all of these amount raised and team size proclamations are extremely short sighted.”

“All three investors on our board, Alfred Lynn from Sequoia, Keith Erboy from Kosla. And Steve Saraceno from Activant.”

“Originally led the Series A from Coastal Ventures, five on 25 post and then doubled down and joined the board, and then doubled down from Founders Fund when I shifted over to there.”

“By the way, I, since I started the firm 20 years ago, I've never taken a dollar in fees.”

“And I said, fine, I'll give you a two million dollar seed. And if you prove this out, then we can talk more. They came back in March of this year, not very long ago, and said, here's the results that I promised. I said, don't go out. I'll write you a fifteen m…”

“Almost every successful investment of founders fund over eight funds was invested at a five hundred million dollars or more entry valuation. And almost every single investment at KV in eight funds was like the seed or series a investment with very few exceptio…”

“Over the years, I've sat through partner presentations, and we've never really pulled the trigger.”

“Coastal Ventures, led by none other than Keith Raboi, has teamed up with Founders Fund to throw a ten million dollar Series A pass to Lava, a Bitcoin lending platform out of New York.”

“Business and product building is very similar to your marriage. You have many opportunities before your marriage, but to be happy, you should choose one and really focus. And my advice to you, choose one business model and be really focused.”

“Since I started the firm 20 years ago, I've never been I've taken a dollar in fees.”

“I would guess That 80% of the investments we've made in C are below twenty-five million posts.”

“I'd say 80% or 90% of the billion dollar valuations, maybe more, we pass on.”

“We have a greenhouse that's fully automated, including picking the strawberries, which would be hard to do by hand. And they sell at like five times the price in every New York restaurant prices them at like five bucks a strawberry or something. But there are …”

“They understood immediately why RAMP had a lot of the secret sauce to be successful in using AI in finance and that nobody else on the planet does. And so they were really excited to meet with actually Eric and Kareem, almost independent of investing. It was m…”

“I don't like build spreadsheets and I try to underwrite to three X, four X, five X, not what I do at least.”

“KV generally the first question was you know, what is the technological differentiation that this you know, company has versus, you know, a founder's fund you know, typically the very first question that we ask is, you know, sort of why are we going to appreci…”

“KV is a really great place to, you know, sort of learn you know, venture in that you just get so much, you know, sort of exposure to the team because of those eight hour line partner meetings, there's very rigorous discussions, a memo writing culture, usually …”

“So we had very extensive partner meetings every Monday for hours at a time, and we vigorously debated new investments as well as the Impact and a potential upside of the current portfolio.”

“If I want to do something that's very not standard or very controversial or not expected, I'm kind of burning and consuming some social capital. Now, if I make the right call that That gets paid back with interest, and you know, the next time I want to make a …”

“I had already, like, locked in a turn sheet to lead the series seat for Robin Hood chilling at 20 post, which was pretty expensive, but they came back and Really wanted me to join the board in the seed round, and this was in maybe my second year at KB, so I as…”

“Fair came back and said, Max said to me, you know, we chatted, I chatted with my co-founders, and, you know, we'll say yes, but you have to join the board, and having learned and been burned by the Robinhood experience, I never really told my partners that I w…”

“At the time at KV, when we invested in Stripe Series C, it was an order of magnitude more expensive than the entry price for any investment in the history of KV.”

“So KV, although that's a, sounds like a big number, four hundred fifteen million of that is for seed investing, 1.5 billion or so is for venture, and only about eight or nine hundred million is for growth.”

“Founders fund, we do, we did it too, but more on an ad hoc basis, not systematic, but at KVU is very systematic, like top down.”

“He was on the, you know, the AI crusade before I even joined KV in 2013. He published papers about, you know, how AI was going to replace doctors in medicine, and this is like before I joined KV, so way ahead of the curve.”

“Another one of my favorites is a new and you were asking about this, a music model to produce music that is not trained on any YouTube or public music. So completely IP free of any constraints. Like, I'm really excited about it. Little outfit in Australia, and…”

“Look, when we invested in impossible foods, it was a three million dollar valuation pre-money.”

“You know, we invested in OpenAI and we invested in Conwell Fusion about the same time.”

“Though we are chipping, taping out chips this year.”

“If I look across our portfolio, some of the investments we made more than 10 years ago are, you know, there's a whole number of them. QuantumScape, Verdeji, Lanza Tech, Impossible Foods, that are five to 10 X multiples though they took a longer time to get the…”

“Already I can say the cement we are producing will be 70% less carbon, and our first plants will be operational this year and cheaper. Then traditional Portland cement.”

“Now, I have a colleague at KB who's involved in one company that was trading really, really well, and he was very savvy. And decided to sell. That decision alone returned KB-Five, which is a 1.3 billion dollar fund.”

“Andreessen was the first to kind of make the statement where Mark Andreessen said, when I was raising my Series B, Andreessen Horowitz actually gave me a term sheet. So did Founders Fund and Kosla, and I went with Kosla. Andreessen was like, look, we're going …”

“I had three term sheets for my Series B. It was from Andreessen Horowitz, Khosla Ventures, and Founders Fund. And Founders Fund came in kind of last minute. But I went with Khosla, even though it's a lower valuation”

“Our firm and I am much more focused on how do you build company, not on returns. And if we build a big, successful company, then the returns take care of itself. So returns come second, building something of significance comes first.”

“We don't allow IRR calculations in our firm when making an investment, which is pretty unusual for an investment firm. We never look at them.”

“We will not make an investment that's negative for society. We might make some neutral ones, and there's real situations where we passed on hundreds of millions of dollars of profit because we didn't want to do the wrong thing because it conflicted with our va…”

“For example, we've chosen not to invest in some areas like gambling or encouraging drinking. That was a recent example that came up. Or debt collection, things like that. We basically don't invest in advertising tools now, which I think are being used fairly n…”

“If somebody talks about exits or IPOs in the first few slides, I almost never go beyond that, say, if that's your focus, we are not a good fit for you, the founder.”

“In this business, being conservative is a real problem, because we're in the business of returning 20% or greater net IRR to our investors, and we don't get judged by how many companies succeed out of the number of companies we invest in.”

“And I think one of the things I really love about our firm is that though we do invest half or more in traditional venture areas. We also spend about a third or so of our allocation in areas that have yet to be disrupted by technology, don't have venture there…”

“In my 17 years being here, I can't remember a veto. We don't really even have a number for a veto.”

“You know, I think when we invested in the Series A of Square, I think it was around a thirty million dollar valuation. It was Jack and Jim in a PowerPoint.”

“Square is in the banking industry. Gardent and Oscar have been in the healthcare industry. Impossible Foods is in the food industry. These are, you know, very, very regulated markets, and they've been some of our biggest wins.”

“We will end up positive, and there's a number of companies that are worth north of a few billion dollars there that are making real impacts.”

“Nine years ago in our office, we gave Pat the first three million bucks.”

“So when Jack was starting square and we met with him, he said, well, you know, if you thought Twitter was expensive, this is going to be even more expensive. And his first round was at a 40 pre and we learned our lesson and we were fortunate enough to be the S…”

“So some of the junior people here, when they ask me, hey, at this other firm, people, young people are going on boards, can I be on a board? I say, you haven't earned the right to advise an entrepreneur, so it's unfair to the entrepreneur.”

“And we, I think I said yes to him in our very first meeting. We didn't last. I didn't even need to know the details. It was just a vision too big to not attempt.”

“In the valley, Kostla Ventures probably is the most advanced on this. Exactly. They actually call them science experiments. Which is, but by the way, the terms are like, ah, you know, literally like they'll invest a million dollars at a million, at a one milli…”

“The investors that I went with in forward, people like Founders Fund or Kosla, Keith Raboy at Kosla, who I know has been on your show. These are people that when times get tough have been good actors.”

“We raised fifty million at this point. So, so basically the trajectory was it was the first 12,000 from Y Combinator. Then we raised 40,000 in angel money. And then at that point we got some tractions. We really quickly went to raise three and a half million f…”

“One thing we did do that has a trade-off is we took on some signaling risk by including large funds like Thrive, And Coastal and our seed round that can cause an issue down the line where if they don't end up supporting you, it makes it challenging for a new i…”