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

90% of investors add no value. In my assessment, 70% of investors add negative value to a company. That means they're advising a company when they haven't earned the right to advise an entrepreneur. So some of the junior people here, when they ask me, hey, at this other firm, young people are going on boards, can I be on a board? I say, 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. The biggest piece of it, not the only way, is have you built a large company, have you gone through how hard it is, how uncertain it is, how traumatic it is to go through? I mean just this morning I was talking to somebody about how many times we almost worried about making payroll at sun, of going bankrupt. Plenty of times. Like more than two. Yeah, I think there was probably a month or two when the earliest I went home was at 3am and the latest I was back in the office was 7am Unless you felt that gut wrenching decision, you can't advise an entrepreneur. I hate board members who sit in a board meeting and say, oh, can you improve quality and then five minutes later can you ship faster and five minutes later spend less money? And they've never gone through really hard trade offs. And how uncertain that is. If somebody's never dealt with this decision making under ambiguity and they're in a big company, they're not qualified to help you if you have a marketing problem. If you ask somebody who's done marketing at IBM, they've never dealt with things where market isn't established, it's incremental year to year, 5% improvement is what they're shooting for. They're not qualified to invent whole new markets, whole new approaches to markets 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. I had an argument just last week with another co investor in a health care company. They wanted this health care person who never dealt with change beyond 2% a year. And I'm like, experience doesn't matter. The rate of learning matters. First principles, thinking matters. Pick for the best athlete, not the person who's the most established wide receiver who knows how to run one pattern and one pattern only.