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Keith Rabois: The End of Woke Capitalism; Time Allocation Tips; Silicon Valley vs Miami | 20VC #891

Keith Rabois is a General Partner @ Founders Fund, one of the best performing funds of the last decade with a portfolio including Facebook, Airbnb, SpaceX, Stripe, Anduril, the list goes on. As for Keith, he has led the first institutional investments in DoorDash, Affirm and co-founded Open Door. He has also led investments in Faire, Ramp, Trade Republic and Stripe. As an operator, Keith has an unparalleled track record as a Senior Exec at PayPal, he then went on to influential roles at LinkedIn and being COO at Square. Finally, as an angel, Keith made early investments into Airbnb, Lyft, Palantir, Wish and more. Keith Rabois on Why Buy Low, Sell High Does Not Work in Venture, Keith’s Biggest Lessons from Prior Crashes, Why Today’s Public Markets are not an Over-Reaction, Why Valuation is a Trap & Why Wokeness is a Function of Entitlement -------------------------------------- Chapters: 0:00 Why doesn't "buy low sell high" work in Venture? 04:52 You never anticipate your biggest winners 07:13 Is it worth looking at existing market comprables? 08:58 Is it a good time to be investing right now? 12:28 How do you think about time allocation? 15:30 What do you do when you lose faith in a founder? 16:36 When do you exit a position? 18:08 Are we seeing an overreaction in the markets? 19:10 Do you believe in investing through market cycles? 20:35 Advice for young investors 23:00 Is this the end of wokeness within companies? 24:10 Do you worry about what people say about you? 28:00 Why is Silicon Valley at a disadvantage now? 29:39 What's your biggest miss? 33:09 Do you think VCs add value? 34:39 Best board member you've worked with? 35:20 Biggest insecurity? 36:38 What makes you choose someone to be a protégé? 37:20 Quick Fire -------------------------------------- In Today’s Episode with Keith Rabois: 1.) Buy Low, Sell High: What BS! Why does Keith believe that “buy low, sell high” does not work in venture? Why would it lead you to very dangerous investment decisions at the early stage? How does the size of your fund impact the appropriateness of “buy low, sell high”? 2.) The Current Landscape: Does Keith believe the current state of public markets is an over-reaction or a new normal? How does Keith respond to the suggestion that Founders Fund has paused new investments given the uncertainty in the market? How does Keith think about investing through cycles and temporal diversification? How does Keith advise young investors today questioning whether they are actually any good at this? What does Keith believe are his biggest fears and insecurities today? 3.) Outcome Scenario Planning and Competitor Analysis: Does Keith believe outcome scenario planning is important? Why does Keith believe you can always tell your biggest hits early? What have been the core signs for him? What have been some of Keith’s biggest lessons from Mike Moritz and Vinod Khosla when it comes to upside maximization? What are the right questions to ask? Why does Keith believe you do need to look through public market comps when investing in startups? 4.) Time Allocation and Losing Faith in Founders: How does Keith approach time allocation across the portfolio? Spend time with the winners or help the struggling companies? What have been his biggest lessons here? What does Keith do when he has lost faith in the founder? How does he communicate it to them? What does Kieth believe VCs do wrong when they no longer believe in the founder or company? 5.) Do VCs Add Value? What does Keith believe is the acid test for whether he is doing his job as a VC properly? Why does Keith believe there are only 5 board members that add true value to their companies at scale? Who is the best board member Keith has ever worked with? Why? Why does Keith believe that age is not your friend as an investor? How does he combat this? 6.) The Downfall of SF and Wokeness: Will we see a reduction of wokeness in companies with the public markets correcting and power shifting from employees to employers? Is Keith concerned by the lack of coherence in the US today when it comes to politics? What are the core reasons for the downfall of SF to Keith? Why does he believe it is a net negative to build a company in SF today? -------------------------------------- #KeithRabois #FoundersFund #OpenDoor #20VC #HarryStebbings #VentureCapital #SiliconValley #PayPalMafia #NarrativeViolation

Harry StebbingshostKeith Raboisguest
May 29, 202242mWatch on YouTube ↗

At a glance

WHAT IT’S REALLY ABOUT

Keith Rabois Dissects Venture Cycles, Woke Culture, And Silicon Valley’s Decline

  1. Keith Rabois explains why classic “buy low, sell high” logic breaks in venture capital beyond seed and early Series A, emphasizing probabilistic outcomes, dependency on future financings, and the rarity of true information asymmetry in growth rounds.
  2. He discusses how to think about upside scenarios, time allocation across a portfolio, and the discipline required to avoid overpaying or relying on paper markups and liquidation preferences as signals of success.
  3. Rabois argues that economic stress is killing “woke capitalism,” that in-person companies will outperform remote ones, and that Silicon Valley has shifted from a key advantage to an actual disadvantage versus places like Miami.
  4. He also reflects on aging as an investor, hiring and mentoring the next generation of VCs, and why only a small handful of venture capitalists truly add value at scale.

IDEAS WORTH REMEMBERING

5 ideas

Early-stage venture is inherently ‘buy low, sell high,’ but that’s not a strategy.

At seed and early Series A, companies are messy and unproven, so any success will inherently be at a much higher valuation; the real work is picking the right teams and markets, not gaming entry price.

Growth-stage investing requires true information asymmetry or disciplined pricing.

From Series C onward, most investors share the same information, so paying high prices is effectively betting someone else will overpay later; without asymmetry or tight entry discipline, returns compress and exit timing becomes critical.

You should consciously model the upside case from the first meeting.

Rabois argues you can usually see a 50–100B upside scenario within minutes if it exists, and that explicitly articulating the largest possible outcome is more important than focusing on base cases.

Time is your scarcest resource; don’t let weak companies consume it.

Underperforming startups will naturally demand more time but rarely drive fund returns, so Rabois structures conversations around realistic “best destinations” and filters his involvement by where he can create high leverage.

Relying on other investors’ judgments is a structural mistake in venture.

Most investors are mediocre, so following consensus or syndicate signals tends to drag down your results; Rabois emphasizes forming independent views and being comfortable looking ridiculous for long periods.

WORDS WORTH SAVING

5 quotes

People systematically undervalue their time.

— Keith Rabois

Every time you get your money back as a VC, it means you made a mistake in some ways.

— Keith Rabois

I now believe Silicon Valley’s a disadvantage, not even neutral.

— Keith Rabois

Wokeness is a function of entitlement… distractions fill up a vacuum.

— Keith Rabois

There are probably only five to ten VCs that actually add value at scale.

— Keith Rabois

Why buy-low-sell-high doesn’t map cleanly onto venture capitalUpside scenario planning and recognizing truly massive outcomes earlyValuations, public market comps, and timing exits in growth investingTime allocation, portfolio support, and dealing with underperforming foundersMarket cycles, inflation, and changes in deployment strategyThe decline of Silicon Valley, rise of Miami, and end of woke capitalismVC value-add, board dynamics, aging in venture, and mentoring proteges

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