Keith RaboisManaging Director, Khosla Ventures

My Investment Criteria - Keith Rabois

Name: My Investment Criteria - Keith Rabois
Uploaded: 2020-10-05T07:00:05+00:00
Duration: 1 min 7 s
Channel: Keith Rabois
Description: In this segment, Keith Rabois explains his investment philosophy at Founders Fund, emphasizing that the best deals are those that make half of his…

5 Oct 2020 · 1 min

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In this segment, Keith Rabois explains his investment philosophy at Founders Fund, emphasizing that the best deals are those that make half of his venture‑capitalist peers laugh because they appear ridiculous. He uses this reaction as a test of how differentiated, innovative, and disruptive a company is. The core of his criteria is the founding team: he looks for high‑caliber founders who can navigate the "intellectual maze"—a concept discussed by Balaji Srinivasan and Chris Dixon—turning potential failure into treasure by addressing key risks. The idea must be revolutionary enough that many smart people in Silicon Valley initially deem it absurd, signaling a high‑risk, high‑reward opportunity.

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When I invest in a company at Founders Fund, I want about half of my smart friends who are venture capitalists to laugh at me. And I want them to think that the investment is ridiculous because it's a test of how differentiated is the company, how innovative is the company, how disruptive is the company. You don't want people to really understand why something could work or is likely to work and you're probably not taking enough risk as either a founder or investor. if other people see the future. So that's by far my most important criteria is a founding team, high caliber potential founders that I can envision changing the world with insightful vision of how to do it, which sometimes is referred to as the intellectual maze. They can navigate the intellectual maze, something Balaji teaches at startup engineering at Stanford and Chris Dixon blogged about. So they can navigate you from the path from failure to treasure correctly with the team built around addressing the key risks in that journey. And the idea is revolutionary enough that half of the smart people in Silicon Valley think it's ridiculous.