VINOD KHOSLA: Venture Capitalists Are Not Your Friends

 
 
 

According to Forbes, Vinod Khosla — founder of Khosla Ventures — told a crowd at SXSW that all those venture capitalists slamming back shots with their founder buddies at SXSW were not setting a good standard. Speaking onstage with 500 Startups’ Dave McClure, Khosla noted that the role of venture capitalists should be to challenge entrepreneurs on the weakest part of their strategy — even if means stepping on some toes.

“[Entrepreneurs should say] ‘he pushed me more than anyone else.’ That ends with you saying you wouldn’t want to have anybody else on the board,” Khosla said.

A visionary venture capitalist provides necessary diversity of opinion in early stages, and Khosla said that at his firm “no two people have similar backgrounds.” He also noted that although incubators are valuable, they can end up inflating founders’ positive visions and obscure the problems that need solving.

“If you end up with a slide deck that’s too polished, sometimes you fool yourself on what’s real. You start believing your own bullsh**. It’s a common mode of failure for entrepreneurs. It’s important to realize when you’re overconfident prematurely. Confidence is a good thing. At the same time…  you fail because of the weakest link, not the strongest link. When looking for funding (you should be) not looking for the best valuation, you’re looking for the best help for the particular risks you face in your venture,” Khosla said.

Overall, though, Khosla said that he is indeed friends with most of the entrepreneurs he funds.

Good ol’ Khosla — he’s tough because he cares.