Earlier immediately, Forbes reported that enterprise capitalist, operator and entrepreneur Keith Rabois is returning to Khosla Ventures (“KV”), the Silicon Valley outfit the place he lower his tooth as a full-time VC earlier than becoming a member of Founders Fund (“FF”) in 2019, teaming up with former Stanford classmate Peter Thiel within the course of.

The transfer got here as a shock to trade watchers – together with this one. I spoke with Rabois in October about working for Founders Fund in Miami, the place he moved in the course of the pandemic and likewise oversees a startup known as OpenStore that he co-founded in 2021.

Once we’d talked final, Rabois sounded content material the place he was. Immediately, he mentioned the choice to modify groups was very latest, stemming from a dialogue together with his former Khosla Ventures’ colleague Samir Kaul in regards to the attainable deserves and pitfalls of beginning his personal fund; Rabois says that chat rapidly become dinner with agency founder Vinod Khosla, who individually introduced immediately that he’s “thrilled” about Rabois’ return.

To study extra, I hopped on a Zoom with Rabois this afternoon; extra from that back-and-forth follows, edited frivolously for size and readability.

Congrats on the transfer, although It was by no means crystal clear why you left Khosla Ventures within the first place after spending six years there.

The true motive is de facto easy. I hated coming down from SF to Sand Hill Highway, and KV on the time — this clearly was pre COVID — had a really sturdy in-person, one-office tradition and it was fairly demanding from the highest down that folks needs to be within the workplace a minimum of three or 4 days. And I simply felt that the way forward for enterprise was extra distributed.

I keep in mind speaking to Sam Altman in regards to the professionals and cons of leaving KV for Founders Fund, which was in San Francisco; I used to be like, ‘Am I loopy to issue on this geographic commute stuff?’ And he was like, ‘Look, each single examine on human happiness suggests the one finest predictor is inverse correlation to commute time, and also you’re human, and also you shouldn’t be shy about that.’

I’m tempted to consider you, however I additionally simply heard ‘demanding from the highest down.’ Vinod Khosla is an enormous persona. I’m wondering if that performed a job in why you left initially.

For people who find themselves allergic to big-personality, successful-founder varieties. I don’t suppose both KV or FF could be the perfect. [Khosla and Thiel are] in some methods very comparable. I gave this presentation truly on the [Khosla Ventures] Summit final 12 months. They invited me to talk, and the presentation was in regards to the 5 form of bosses I’ve had in my profession. And it’s like: Vinod, Peter, Reid Hoffman, Max Levchin, and Jack Dorsey. So I’ve made it by means of 23 years, working with strong-willed visionary founder varieties; each corporations have that trait.

Relating to your return, was it an element that Founders Fund in the reduction of the scale of its latest fund, whereas KV simply closed on $3.1 billion?

Undoubtedly not. If something, I used to be a particularly optimistic proponent of reducing the Founders Fund [vehicle].

We talked in October about this. You thought it was a wise adjustment to the market.  However then what do you make of KV transferring in the wrong way?

Crafting a fund technique — sizing the fund — is a sophisticated animal in and of itself.There’s a super dimension for various levels of investing to generate significant returns, after which there’s a group composition. Like,  what number of investments are you able to make and the way a lot cash, and that may be a perform of what number of nice traders you will have on the group. So it’s important to have in mind all these variables. There’s not like a easy method.

My perspective at Founders Fund was that $900 million was the biggest model of a enterprise fund that I assumed made sense for our technique and our group. You may additionally have seen that FF didn’t alter the scale of the expansion fund, whereas the KV {dollars} might look comparable, however they’re allotted otherwise. There’s a $500 million seed fund, then a $1.6 billion enterprise fund, then a $1 billion alternative fund.

How else do the corporations differ? You made an fascinating remark to The Data. You mentioned Founders Fund gives capital and is joyful to assist when requested, which could be very totally different from a mentorship mannequin, which has been your forte. That doesn’t sound like a ringing endorsement for Founders Fund, or do you suppose it’s only a higher agency for established founders who want much less hand-holding?

I didn’t imply it that manner. There’s an excessive amount of capital, there are too many enterprise corporations, it’s hyper aggressive. There’s no strategy to drive important returns except you will have differentiation, and I believe it’s important to differentiate as an individual. So the best way I differentiate is I personally aspire to extend the possibilities of success for any founder and any firm I work with. That’s my objective after I get up within the morning: how do I make this firm extra profitable? Different folks have been very profitable enterprise with a distinct mannequin. Founders Fund, for example, has been extremely profitable through the years with a minimum of a considerably totally different mannequin. I believe at Founders Fund, every associate has a considerably totally different perspective on how [to help companies win].

Is there a strategy to make the variations between the corporations clearer?

I’d say Founders Fund and KV are possibly nearer on a plotted line than most others, and I believe I made that time in 2019. I believe KV prides itself on its technical acumen. Many signature KV investments are hardcore know-how investing, which is one thing I admire. It’s not my comparative benefit, however I loved six years of studying . . .and I’m excited to study extra. I believe it’s uncommon in enterprise to have a talented institutional fund that’s deeply technical.

You’re staying in Miami. Will you develop KV’s footprint there? 

I’m thrilled to be in Miami. I believe the way forward for America goes to be primarily based in Miami. I’m excited that KV’s going to be opening an workplace in Miami and including to the funds that have already got a big presence right here and fleeting founders on in order that makes me extraordinarily joyful. 

I might be commuting  to the Bay Space on common one week a month. I’ve a big variety of board commitments within the Bay Space so I’ve truly been touring to the Bay Space as soon as each six weeks [meaning] I don’t suppose issues might be dramatically totally different. However I’ll attend associate conferences in particular person. Accomplice conferences at KV are fairly crucial to the best way that agency operates.

[As for recruiting], I don’t know. The very first thing I’m going to do is get fairly immersed with KV.

Vinod just lately mentioned one thing about by no means eager to retire. However let’s say that adjustments 15 years from now. Do you suppose you’d be his chosen successor?

I do not know. I imply, put it this fashion: It’s fairly irrelevant as a result of I’m fairly certain Vinod needs to be doing what he’s doing perpetually. He loves what he does. He’s extraordinarily devoted to his craft and what he does. He units an excellent instance for the remainder of the agency by that degree of dedication.