Keith Lavoie talks about his surprising return to Khosla Ventures after leaving the firm for Founders Fund in 2019.

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Today, Forbes reported that venture capitalist, executive, and entrepreneur Keith Lavoie is returning to Silicon Valley company Khosla Ventures (“KV”). He honed his skills as a full-time VC before joining Founders Fund (“FF”) in 2016. In 2019, he teamed up with former Stanford classmate Peter Thiel.

The move came as a surprise to industry watchers, including this one. I spoke with Mr. Lavoie in October about working at Founders Fund in Miami. He also oversees a startup called OpenStore, which he moved to during the pandemic and co-founded in 2021.

When we last spoke, Lavoie seemed content with the situation. Today, he says that his decision to change teams was only recent and that he had discussed the potential benefits and pitfalls of starting his own fund with former Khosla Ventures colleague Sameer Kaur. He said it was the trigger. Lavoie said the chat quickly turned into a dinner with founder Vinod Khosla, who separately announced today that he was “thrilled” to have Lavoie back.

To find out more, I jumped on Zoom with Lavoie this afternoon. A sequel follows, lightly edited for length and clarity.

Congratulations on your transfer. That said, it wasn’t clear to you why he left Khosla Ventures after his six years there in the first place.

The real reason is quite simple. I hated coming down Sand Hill Road from San Francisco. KV at that time was clearly pre-coronavirus. There was a very strong face-to-face one-office culture, and there was quite a top-down requirement that people should be in the same workplace. Stay in the office for at least 3 or 4 days. And I felt that the future of ventures was going to be more decentralized.

I remember talking with Sam Altman about the pros and cons of leaving KV for Founders Fund, which was in San Francisco. I thought to myself, “Am I crazy to even consider geographic commuting?” And he said, “All the research on human happiness suggests that the single best predictor is an inverse correlation with commute time. There’s no need to be shy.”

I’d like to believe it, but I’ve also heard that it’s a “request from above.” Vinod Khosla is a great personality. I wonder if that influenced why you quit in the first place.

For people who are allergic to the big, successful founder type. I don’t think KV or FF is better. [Khosla and Thiel are] In some ways they are very similar.I actually gave this presentation [Khosla Ventures] Last year’s summit. They invited me to give a talk, and the presentation was about the five types of bosses I’ve met in my career. And it’s like: Vinod, Peter, Reid Hoffman, Max Levchin, and Jack Dorsey. There he survived for 23 years, working with strong-willed, visionary founder-type people. Both companies have these characteristics.

Regarding your returns, was it a factor that Founders Fund downsized its latest fund while KV just closed at $3.1 billion?

Absolutely not. If anything, I was very active in reducing Founders Funds. [vehicle].

We talked about this in October. You thought this was a smart correction to the market. But what do you think about KV moving in the opposite direction?

Developing a fund strategy, and thus determining the size of a fund, is a complex task in itself. There are ideal sizes, and even team compositions, for different stages of investment to generate meaningful returns. For example, how much you can invest and for how much money you can invest depends on how many talented investors you have on your team. Therefore, all these variables must be considered. There is no simple formula.

My take on Founders Fund was that $900 million was the largest version of a venture fund that I thought made sense for our strategy and team. You may also have noticed that FF has not changed the size of the growth fund, but while the KV dollars may seem comparable, they are allocated differently. We have a $500 million seed fund, then a $1.6 billion venture fund, and then a $1 billion opportunity fund.

What else is different between the two companies? I received an interesting comment on The Information. You mentioned that Founders Fund provides capital and is happy to help if asked, but this is very different from the mentorship model that is your specialty. Doesn’t that sound like a strong endorsement of Founders Fund, or do you think Founders Fund is a better company for established founders who need less hand-holding?

That wasn’t my intention. There is too much capital, too many venture companies, and too much competition. Without differentiation, we cannot bring about great profits, and I think we need to differentiate ourselves as people. So the way I differentiate, what I personally hope is to increase the odds of success for every founder and every company I work with. My goal when I wake up in the morning is, “How can I make this company even more successful?” Some people have ventured into different models with great success. As an example, Founders Fund has had incredible success over the years with at least a somewhat different model. I think at Founders Fund, each partner has a slightly different perspective on how to handle it. [to help companies win].

Is there a way to make the differences between companies more clear?

I think Founders Fund and KV probably have a closer linear relationship than most other companies. I think I made that point in 2019. I think KV prides itself on its technical acumen. Many of KV’s signature investments are hardcore technology investments, which I appreciate. It’s not my comparative advantage, but I’ve enjoyed learning it for six years. . .and excited to learn more. I think it’s rare in the venture industry to have a skilled institutional investor fund with advanced technology.

You are staying in Miami. Will you expand your KV footprint there?

I’m excited to be in Miami. I think the future of America will be based in Miami. We are excited that KV is opening an office in Miami and bringing additional capital to funds that already have a strong presence in Miami, including his Founders fund. That makes me very happy.

I plan to commute to the Bay Area on average one week a month. He actually travels to the Bay Area once every six weeks because I serve quite a few executives in the Bay Area. [meaning] I don’t think the situation will change dramatically. However, they will attend partner meetings in person. Partner meetings at KV are critical to the way the company operates.

[As for recruiting], I don’t know. The first thing to do is to immerse yourself in KV.

Vinod recently said that he never wants to retire. But let’s say that 15 years from now, things have changed for him. Do you think you will be chosen as his successor?

I don’t know. In other words, you can say: That’s pretty irrelevant, as Vinod is sure he wants to keep doing what he’s doing forever. he loves what he does. He is very dedicated to his craft and his work. He sets a great example for the rest of the company with his level of dedication.