STRATEGIC INNOVATION: Maintech is the new cleantech

Khosla Ventures is hitting a sluggish venture capital market with a $1bn fund and plans to move into spaces not normally covered by VCs. Does the firm offer a new template for a dispirited venture market? Christopher Witkowsky investigates

The venture capital space has produced lacklustre average returns for the past decade, but Menlo Park-based Khosla Ventures is hoping to change all this with its freshly raised $1 billion investment pot.

Khosla closed two funds in recent weeks. Established by Sun Microsystems founder Vinod Khosla, the firm collected $250 million for its Khosla Ventures Seed fund for investments in the earliest stage of projects. The firm also secured $750 million for Khosla Ventures III, which is targeting early and mid-stage investments.

The two funds were backed by some big-name pensions in the US, including the California Public Employees’ Retirement System, which committed $200 million to anchor Khosla’s funds.


US venture capital performance has notably declined in recent years
Pooled Mean Net
Period to Limited Partners (%)*
One Quarter (2.87)
One Year (17.49)
Three Year 1.31
Five Year 5.80
Ten Year 26.16
Fifteen Year 34.23
Twenty Year 22.49