Vinod Khosla: “70% of investors add negative value to a company”

When junior team members at Khosla Ventures ask Vinod if they can serve on portfolio company boards, Vinod responds:

“You haven’t earned the right to advise an entrepreneur. Just because you got an MBA and joined a venture firm doesn’t mean you’re qualified to advise an entrepreneur.”

Vinod believes one of the best ways to earn that right (but not the only way) is to build a large company yourself:

“Have you gone through how hard it is, how uncertain it is, how traumatic it is to go through?… If somebody has never dealt with this decision-making under ambiguity, they’re not qualified to help you… Whose advice to trust on what topic is the single hardest decision an entrepreneur makes. It’s also where the right investors can really help you.”

He gives the example of asking a marketing executive at IBM for marketing advice:

“They’ve never dealt with things where the market isn’t established… They’re not qualified to invent whole new markets.”

He also recalls a recent argument with a co-investor who wanted their healthcare portfolio company to hire a healthcare executive from an established company:

“They wanted this healthcare person who had never dealt with change beyond 2% a year, and I’m like, experience doesn’t matter. The rate of learning matters [for a role like this].”

Full video: Y Combinator “Vinod Khosla on How to Build the Future“ (Jan 2019)