Vinod Khosla: “Stop Asking Me About the Markets”
If you want to fund radical innovation, the short-term ups and downs don't matter.
Vinod Khosla is founder of Khosla Ventures and has spent the last 40 years in the business of innovation. He was the co-founder of Sun Microsystems. Khosla Ventures is an investor in OpenAI.
We in venture capital often get asked, “How is the market cycle affecting your investing?” And at times like this, with tech stocks now in correction territory, we get it more than ever.
Here’s the answer: If you’re pursuing radical innovation, market cycles matter much less.
Public market and hedge fund investors evaluate themselves every quarter. Venture funds might have to wait as long as 10 years to assess how their investments performed. We should be cautious about frenzied valuations and investment cycles, but, aside from that, should ignore the ups and downs. What will the market look like in five or eight years, the typical holding period for an investment? Who will be president or which party will be in power? Will interest rates be going up or down? Will multiples expand or compress? These are extremely difficult, likely impossible questions to answer. So why try?
