Keith is a Partner at Khosla Ventures and early investor in YouTube, Yelp, Yammer and Airbnb. Below are some investing lessons from our session with Keith.
Invest in deals that are uniquely suited to you
Investing is generally an efficient market, so you should focus on deals where you have a proprietary advantage. Whenever Keith is considering an investment he asks himself “why am I uniquely situated to lead this deal over other VCs?”
Your advantage can come from having superior insight into the market, being able to conduct better diligence or from selling your value-add more effectively. Because of his experience at PayPal and Square, Keith has an edge investing in heavily regulated industries.
Look for companies where if you don’t invest, nobody will
Sometimes the most interesting companies are ugly ducklings. As an angel, the issue is that your capital alone isn’t enough to get the company over the hump. So you need to recruit friends to invest in ugly ducklings, which is a lot of work.
As a VC, investing in ugly ducklings is easier because your capital alone may be sufficient. You still need to recruit investors for the next round, however.
Spearhead is a program that funds and mentors founders so they can start angel investing. Founders get exclusive access to masterclasses from investors such as Keith Rabois. Spearhead is currently accepting applications for the 2019 cohort. Apply by Oct 31.