Samir KaulFounding General Partner, Khosla Ventures

Samir Kaul of Khosla Ventures on entrapment valuations

Name: Samir Kaul of Khosla Ventures on entrapment valuations
Uploaded: 2018-05-15T07:00:00+00:00
Duration: 45 s
Channel: Samir Kaul
Description: In this interview excerpt, Samir Kaul of Khosla Ventures critiques the current tech ecosystem, arguing that an overabundance of capital has driven…

15 May 2018 · 1 min

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In this interview excerpt, Samir Kaul of Khosla Ventures critiques the current tech ecosystem, arguing that an overabundance of capital has driven valuations to unsustainably high levels. He explains that inflated valuations trap companies, making exits difficult and causing many potential successes—especially those reminiscent of the dot‑com era—to fail because they cannot sell below their lofty price tags. Kaul also notes that venture capital can have the greatest impact by looking at tangential opportunities in the food sector, citing examples such as Blue Bottle and Instacart, which illustrate how VCs can add value outside the core tech arena.

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impossible. No one was doing food. They just didn't. If they did food, they would do something like a Blue Bottle, or we did Instacart, you know. So I'd say tangential to the food market. And I think that's how you could have the most impact in venture capital. I think part of the problem we're seeing in the tech industry is there, there's too much money available, which drives valuations way too high, and it makes it harder for these companies. And it's actually bad for companies to have— there's so many companies from the dot-com era that would have been successful if if they had lower valuations, because they would have then been able to exit and stay alive. But they had these massive dot-com-like valuations and they got stuck, because how do you sell for less than that price? What kind