Vinod Khosla: “An investor is an employee you can’t fire”

Sam Altman asks Vinod how founders who want to build significant companies that will be around for decades should think about their investors.

Vinod believes that money is the smaller part of what you get from an investor:

“Advice and the right approach is the much more important part.”

He warns that investors who are happy with 3x their money may want to sell before you do. People who care about your vision won’t, and they’ll be much more tolerant when things inevitably go wrong.

To figure out if an investor will care about your vision, you have to talk to other founders—especially founders with a large vision who had hiccups along the way.

“When things go wrong along an ambitious path is when you can actually judge an investor. I think an investor is an employee you can’t fire, and that’s how you should think about it.”

He continues:

“Most investors are negative value add to a company that’s trying to be ambitious if they’re just trying to get to liquidity as soon as possible.”

When a founder comes to Vinod with an ambitious vision, he tries to help them think through the steps to get there and how to thoughtfully discover the risks on the path to that vision.

Sam Altman adds:

“The only recipe I’ve ever seen work for making really impactful companies is both a giant vision and a good step one, two, and three. You have to have both, and neither without the other will work.”

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