Key Takeaways
- • Keith Rabois, General Partner at Founders Fund (the transcript also refers to Khosla Ventures), argues that the team a company builds determines the company it becomes, and that people matter more than products, markets, or technology.
- • Rabois says changing team composition at the earliest stage can raise a startup's odds of success from the often-cited 1 to 10 percent to roughly 30 to 40 percent.
- • Rabois reports making 80 to 85 angel investments between 2003 and 2013, typically $30,000 to $200,000, and says his checks at Khosla Ventures have generally been $1 million to $3 million at seed.
- • Rabois describes his approach as matchmaking founders with missing co-founders, such as AI, engineering, hardware, or business co-founders, with a board member's network used to recruit executives like CFOs and VPs of engineering.
Summary
In a SaaStr Annual session transcript published by saastr.com, Keith Rabois, General Partner at Founders Fund, outlined his lessons on building startup teams. Moderated by Lloyed Lobo, co-founder of Boost.ai, the conversation covered team composition, early-stage investing, and how investors can help build teams. Rabois, who previously held senior roles at PayPal, LinkedIn, and Square and started Opendoor, said founders most often ask him about team building.
Rabois said he was influenced by an adage from a Khosla Ventures founding partner who had sat on his board at Square: the team you build is the company you build. He said his experience at PayPal reinforced this view, noting that a small group of 20 to 40 exceptional people was decisive for a company that could have failed. He argued that without people who can leverage a product or technology over five to 15 years, a company will not become iconic. He also said the ideal team depends on the project, comparing the needs of a space rocket company with those of a Facebook competitor.
On early-stage composition, Rabois said investors can materially improve a startup's odds by identifying missing skills. He described matchmaking founders with co-founders who supply missing expertise, with equity allocated accordingly, and said a board member's network can help recruit specialists whom founders often cannot assess themselves. Rabois said he has invested in 15 to 20 unicorns as an angel and roughly five to 10 as a Founders Fund partner. He described spotting a founder with exceptional drive as the key early signal, before products or metrics exist, in contrast to later-stage Series B investing based on fundamentals.
Rabois said his angel checks between 2003 and 2013 ranged from $30,000 to $200,000, while at Khosla Ventures he rarely invests under $500,000 and typically writes $1 million to $3 million checks at seed. He compared culture and team-building to concrete that is easiest to shape early, and said he prefers seed investments while still investing in Series A and B rounds. He cited recent examples of a self-driving startup backed despite a crowded field and a company called Fair, which he said had raised more than $100 million, though the transcript does not verify these details beyond his account.
Rabois said he was influenced by an adage from a Khosla Ventures founding partner who had sat on his board at Square: the team you build is the company you build. He said his experience at PayPal reinforced this view, noting that a small group of 20 to 40 exceptional people was decisive for a company that could have failed. He argued that without people who can leverage a product or technology over five to 15 years, a company will not become iconic. He also said the ideal team depends on the project, comparing the needs of a space rocket company with those of a Facebook competitor.
On early-stage composition, Rabois said investors can materially improve a startup's odds by identifying missing skills. He described matchmaking founders with co-founders who supply missing expertise, with equity allocated accordingly, and said a board member's network can help recruit specialists whom founders often cannot assess themselves. Rabois said he has invested in 15 to 20 unicorns as an angel and roughly five to 10 as a Founders Fund partner. He described spotting a founder with exceptional drive as the key early signal, before products or metrics exist, in contrast to later-stage Series B investing based on fundamentals.
Rabois said his angel checks between 2003 and 2013 ranged from $30,000 to $200,000, while at Khosla Ventures he rarely invests under $500,000 and typically writes $1 million to $3 million checks at seed. He compared culture and team-building to concrete that is easiest to shape early, and said he prefers seed investments while still investing in Series A and B rounds. He cited recent examples of a self-driving startup backed despite a crowded field and a company called Fair, which he said had raised more than $100 million, though the transcript does not verify these details beyond his account.
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