Indian-origin venture capitalist Vinod Khosla responded to an American entrepreneur who accused him of asking him to fire his co-founders in exchange for a more favourable investment deal. It all began when a post on X set off a viral thread in which founders shared their worst encounters with venture capitalists (VCs) during fundraising.
What is the allegation against Vinod Khosla?
Matthew Prince, CEO and co-founder of Cloudflare, was among those who shared his experiences. He named Khosla in one of his “worst VC stories”. The Cloudflare CEO recalled the time when Khosla took him and his co-founders out to dinner, with the Pune-born billionaire looking to invest in his company’s Series C funding round.
“Vinod took me, Michelle (Zatlyn), and Lee (Holloway) out to dinner after he’d given us a term sheet. Near the end, Michelle and Lee got up to use the restroom. Vinod leaned over and said: ‘I’m impressed with you, not so much with them, what if you fire them and I’ll give you all their stock?’ Prince wrote in his now-viral X post.
“I think the charitable read was it was a test of my character. But I was so offended that we never spoke again. Literally blocked his number.”
Vinod Khosla responds to viral tweet
While Khosla did not directly address the specific allegation, he said he stands by his practice of telling his opinion to founders with “brutal honesty”.
“Apologies, I may sometimes be wrong, but I will always give entrepreneurs my best and honest opinion, popular or not,” Khosla, 71, said in one of the posts over the weekend.
“I am often wrong but always give honest opinions. Some find this harsh but hypocritical politeness hurts founders. Brutal honesty gives them a chance to evaluate it and accept or reject the opinion. Great founders elect for honesty. It is not fun to offer brutal honesty,” he said in another post.
Matthew Prince’s allegation against Vinod Khosla opened a series of posts from people sharing their experience with him. Several entrepreneurs backed Khosla’s working style, saying he always takes decisions he believes are right for the company, not necessarily for the founder.
“He won’t coddle you. He won’t waste your time. He assesses fast, tells you straight, and stays ruthlessly fixed on one thing: what’s right for the company,” said Sudheesh Nair, a San Francisco-based founder.
“If you are a founder and Vinod Khosla offers you money or advice, take it. This is a no-brainer,” said Kaz Nejatian, a CEO based in Canada.
(Also Read: Indian-American billionaire Vinod Khosla reacts to pro-ICE post by his firm’s MD)
Vinod Khosla net worth
Vinod Khosla, co-founder of computer hardware firm Sun Microsystems, founded venture capitalist firm Khosla Ventures in 2004. He moved to the United States after completing his engineering from the Indian Institute of Technology-Delhi (IIT-Delhi). He has a net worth of $14.4 billion, according to Forbes.
