coleslawfail

If only the Onion knew the Valley, this would be a great headline:

Vinod Khosla: Be Wary of “Stupid Advice”

that's like saying:

Donald Trump: Be Wary of "Gold Diggers"

How long ago? He's been at this almost 30 years. He doesn't need the money. Now it's all about him. Martin's Beach is the symptom of the disease.

90% of the time Vinod Khosla pulls numbers out of his ass.

It's amazing really how much this guy subs the press. He acts as the entrepreneur's friend when the truth in the Valley is the exact opposite.

Beware.

Repeating as public service announcement of what folks in the know tell each other:

Vinod has a very negative reputation in the Valley. He used to be known as the biggest anti-founder VC when he was at Kleiner. He'd come in, use sharp elbows to push founders around and out, then companies would crumble. He's learned but not enough.

His new marketing of himself has helped (as has Rabois), but you can't change who he is. When given a chance, he'll take advantage of early stage startups. That's why you don't see many companies he's made. And he's been at it a long time - 27 years! He gets in the way because it's all about him and his huge, insatiable ego. He's much more old school VC in that way - but in the Tom Perkins vein, not Don Valentine. It's his way because it's his money.

The only way to keep Vinod honest is to get other investors. If he's your lead, the knife isn't far from your back.

It's exactly the principle. If VK won, many many others would push for the same and soon it's no longer one little beach but many, many miles.

No one here is evil. VCs have a very important role to play in the startup ecosystem. Their job is to produce significant returns to their LPs. If you can't deliver that, then you shouldn't have taken their money.

It should. He pushes around the little people. That's first time founders and especially those not connected in the Valley.

This is the time I need to pop up every so often. Vinod has a very negative reputation in the Valley. He used to be known as the biggest anti-founder VC when he was at Kleiner. He'd come in, use sharp elbows to push founders around and out, then companies would crumble. He's learned but not enough.

His new marketing of himself has helped (as has Rabois), but you can't change who he is. When given a chance, he'll take advantage of early stage startups. That's why you don't see many companies he's made. And he's been at it a long time - 27 years! He gets in the way because it's all about him and his huge, insatiable ego. He's much more old school VC in that way - but in the Tom Perkins vein, not Don Valentine. It's his way because it's his money.

The only way to keep Vinod honest is to get other investors. If he's your lead, the knife isn't far from your back.

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.

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.

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.

Or in the case of "experiments" KV insists on two seats and takes the option pool from founders at the seed stage.

I get why you are presenting the rosiest picture, but at least be honest that Bad Vinod exists and is pernicious for the firm and many early founders.

And control provisions?

Jack was never going to see Bad Vinod. And he was never going to give up enough equity/control to let Vinod's ego run wild.

And as someone knows the word has gotten out about Vinod must actively combat that reputation.

I wish you luck. Good Vinod can be as fine a partner as any, I'm sure. It's just the history of Bad Vinod, and how he has treated founders, that holds the firm back. His partners end up more as minions than a check on his ego.

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.

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.

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.

Nope, he hasn't except to know who to mess with. New founders get Bad Vinod. Experienced founders get Good Vinod.

WTF and Khosla go hand in hand.

Again, he can negotiate any way he pleases. Just don't pretend and market yourself as some great friend to founders. He's decidedly not.

Some of those have already exited and for barely getting their money back.

Square is the outlier. But Dorsey was proven by that point. His success certainly isn't Khosla.

Again, don't just look at KV. Khosla has been at this for a long-time starting at Kleiner. Where are all the companies he made? Those aren't that...

Final tally - 51 votes here to the contrary.

Those who know avoid Khosla.

For all you new founders, tread lightly.

Thank you for saying this publicly. If more did the bubble around his persona would quickly pop.

I'd have no problem if all he did was negotiate good terms. He certainly owes his LPs that. The problem I have is presents the persona as being founder friendly. Sadly, he's at the far other side of that spectrum.

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.

As my note below implies, there's a big difference between a lead investor and a follow on. If he were a go-to VC, we'd see it in his portfolio.

Vinod's been at this far long enough to judge his results. He gets his ROI but at the expense of founders. That's why we don't see him in the upper echelon and where his marketing doesn't match what is known among knowledgeable parties.

Also, was KV your lead investor?

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.

Glad you have had a positive experience. I wish you the best in building your company.

Can you comment on why so few YC companies have raised from them?

My comments have received a total of 53 points. KV has tried suing thefunded. And big, successful startups haven't taken his money.

Of course, then there's insisting on 50% equity plus an options pool that comes from founder shares at the seed stage...

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.

38 points - so far - from those 7 comments. I'm simply saying what many, many people already know to be true.

But again, judge his portfolio for yourself. For a guy who says he's founder friendly where's the first generation of successful founders. He's been at it long enough...