A Q&A with the Managing Director of Khosla Ventures
In October 2018, Keith Rabois, managing director of Khosla Ventures, had dinner with a ‘very successful CEO’ who asked him a question that sparked an idea: How many people does it take to create a whole new Silicon Valley? Is it 10,000? 100,000?
Rabois didn’t know the answer, but he decided to accept the challenge and set out to make Miami the next tech hub.
Miami’s Rise as a Tech Hub
Fast forward to today, Rabois is still bullish on Miami despite other big name investors like Andreessen Horowitz decamping and shutting down its office in Miami just two years after setting up shop. However, Rabois claims that 11% of all seed investments in the United States have come out of Miami, which is ‘up basically from zero,’ and he hopes to raise that to 20%.
According to PitchBook data, seed investments into Miami startups accounted for only 2.6% of total U.S. seed investment this year, and 3.5% in 2023. Rabois emphasizes that these statistics should be looked at as a fraction of seed investments, where do they happen?
Later-Stage Investment: A Different Story
Rabois also points out that later-stage investment reveals less about the future of technology. He believes that early-stage investment is more indicative of the potential for growth and innovation.
Khosla Ventures’ Involvement in Miami
In April, Khosla and Founders Fund led a $150 million investment into spend management startup Ramp, which has an office in Miami. Rabois claims that this investment was one of several in his firm’s pipeline for companies in the city.
Reinventing Education
Rabois also mentions that Khosla Ventures is gearing up to invest in its fifth company in Miami that will ‘reinvent education,’ but he doesn’t provide specifics. This new venture could potentially bring a fresh perspective to the education sector and contribute to the growth of Miami’s tech ecosystem.
Ramp: A Success Story
Rabois highlights Ramp as an example of a successful startup that has established itself in Miami, despite being based in New York. He believes that having an office in Miami adds to the city’s appeal for both founders and investors.
Why Miami?
When asked why he is so enthusiastic about Miami, Rabois responds by saying that it takes work to build a new tech hub. He emphasizes that vibrant cities offer opportunities for founders and investors to grow their businesses without fear of being ‘assaulted and abused.’ This comment is likely a reference to the homeless and opioid epidemic in San Francisco.
San Francisco: A Contrast
Rabois hasn’t abandoned San Francisco altogether, as he reportedly spends about a quarter of his time at his home there. However, his comments suggest that he sees Miami as a more attractive option for building a tech ecosystem.
Backing Daniel Lurie
As an aside, Rabois mentions that he will be backing Daniel Lurie’s mayoral campaign in San Francisco. Lurie has taken a hard stance on addressing the opioid crisis, which is a pressing issue in the city.
Building a Tech Ecosystem
Rabois emphasizes that creating a tech ecosystem requires angel investors, founders, Series A investors, and a diverse range of skills within companies. He believes that proselytizing is crucial for building momentum and attracting more investment to the region.
Conclusion
Keith Rabois’ enthusiasm for Miami as a potential Silicon Valley is palpable. While challenges lie ahead, his confidence in the city’s potential is inspiring. As we continue to watch Miami grow into a major tech hub, it will be interesting to see how Rabois and Khosla Ventures contribute to its development.
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