Five things to learn from Khosla Ventures’ newest partner Keith Rabois

In one of his first public appearances since joining Khosla Ventures back in February, longtime Silicon Valley entrepreneur and investor Keith Rabois talked about a wide range of topics, including Stanford football, the so-called Series A crunch and working with the press.
Rabois recently resigned from Square, where he was serving as COO in January after an employee accused him of sexual harassment. Square accepted his resignation but has so far backed Rabois and he joined Khosla Ventures in February. Vinod Khosla said in an interview at the time that he was consistently impressed with Rabois’ business expertise, and said he heard from entrepreneurs that Rabois was one of the most sought-after advisers in Silicon Valley.
During the Founder’s Showcase event on the future of investing on Wednesday, Rabois didn’t break a lot of new ground, but here were five things he told us:

His “Spidey Sense” tells him the Series A Crunch is probably real

Various people have written about the Series A crunch, and Rabois said he thinks it’s probably not just hyperbole. It is actually getting harder for companies to move from raising a seed round to raising a Series A round, especially with crowdfunding platforms like Kickstarter making it easier to get in the game.
“My spidey sense is that there is a real change,” he said.

Half the battle for startups lies with people

“Capital is one of the resources you need to build a real business, but people are the other. And people are incredibly scarce,” he said.

Party rounds are not that effective

“When you do that, no one really cares. They won’t wake up in the morning and think about your company. Most of the people will return your call and try to be helpful, but it’s very different having a partner and having an investor,” Rabois said of party rounds, which are investment rounds involving a large number of people where no one has a substantially larger stake.

When dealing with the press, be honest

Having worked on communications teams for a variety of startups, Rabois said honesty is the best policy and it’s not worth taking short-term gains if you think you’ll be around for a while. This gets harder if a reporter hears that you raised funding that you’re not ready to announce, but he said he’s always tried to give more than a “no comment.”

Being a good VC is an art, not a science

In response to questions about metrics he looks for or benchmarks he wants to see in companies he invests in, Rabois said metrics are important to an extent, but anyone can look at numbers and make a call. Being a successful venture capitalist is about the art of recognizing unique founders or market opportunities.
“It’s pretty much a commodity skill to look at numbers. It’s not a real skill,” he joked. “Investment bankers can look at metrics.”