Vinod Khosla, founder of venture capital firm Khosla Ventures, has spoken about how to improve collaboration between traditional venture capital firms and the strategic investment arms of many of the world’s leading businesses at the GCV Digital Forum 2021.
Khosla spoke in the open keynote fireside chat at the GCV Digital Forum 2021 alongside Victor Boyajian, a global chairman and partner at law firm Dentons.
Sun Microsystems co-founder Khosla established the firm in 2004, which has since grown to over $5bn of assets under management. The firm invests in a range of sectors including consumer, enterprise, education, financial services, health and robotics.
When asked whether Khosla Ventures is actively approaching corporate strategic investors in its deals, Khosla said: “Surprising as it may seem, we have never had a sourcing function in our firm.”
“They just happen to come our way and we have a lot of relationships.”
Khosla also highlighted events like the GCV Digital Forum as a great opportunity to source deals and to partner with corporate investors.
Khosla said it makes a lot of sense to partner with corporate investors when they are interested in the same sectors. He added that when you are investing in areas like deep technology, that kind of partnership is needed.
Khosla mentioned robotics and artificial intelligence as areas in which it is partnering with a number of corporate venture firms.
When discussing what sort of positive characteristics corporate venturing firms bring to deals, Khosla said that some corporates understand markets better than venture capitalists.
“They generally have a better handle on the competitive offerings in their area because they are focused on one area.”
“Sometimes, if a technology is facing specific risks, they will have expertise in that area.”
However, Koshla said that the length of time it takes to partner with corporate investors is an issue he has encountered in the past. Koshla also said that corporate investors could do better is setting expectations correctly.
“Being fast is valuable, but even more valuable is setting expectations.”