Vinod Khosla hates board meetings, says most VCs ‘add negative value’ to startups

Vinod Khosla

Vinod Khosla

SAN FRANCISCO — Vinod Khosla has had it with VCs. Today at the TechCrunch Disrupt conference, the Sun Microsystems co-founder said that 90 percent of venture capitalists don’t add value to the startups they advise.

In a conversation today with TechCrunch founder Michael Arrington, Khosla, who runs the firm Khosla Ventures, said that entrepreneurs need to be careful with who they trust to advise them.

“Knowing whose advice to take and on what topic may be the single most difficult decision an entrepreneur will have to make,” Khosla said.

What’s worse, he said, most of the advice available to founders from VCs on their boards is bad.

“I would guess 70 to 85 percent of VCs add negative value to a startup in advising them,” Khosla said. “This is why I don’t show up to board meetings, usually.”

Instead, he said, he prefers to meet with entrepreneurs one-on-one, to avoid having to spend time in board meetings.

  • penultimate network systems

    the venerable peter drucker said that 1 out of 3 decisions made by managers has a nominal positive effect. and 1 out of 3 decisions will be completely wrong. so 66% of decisions don’t help or hurt the business. if a VC can’t prove without a doubt that their decisions are better than that success rate, then there is no reason to listen to them. and i’m talking about proving it with real empirical data. not just a bunch of hot air.

  • Sudip Verma

    Not all VC’s are created alike, so while I can understand Mr. Khosla’s point of view there are VC’s that can add value to their portfolio companies. We’ve posted a blog on some things entrepreneurs should look for in their choice of VC: http://blog.openviewpartners.com/khosla-vcs-add-negative-value/