Most VCs Are Afraid to Be Wrong | Rohan Pujara

Rohan Pujara (0:00)

I have a list of people on my phone that have generated more than a billion dollars of DPI on an individual investment more than once. And there's only 21 people on that list ever. So it's a pretty shockingly low number relative to the number of people that have been investing in venture capital over the last 50 years. And so I think it shows you that a lot of people get luckier once. SF is the home of the consensus. If there's a founder in SF, everyone is clawing to meet them. It's also this kind of intellectual bubble that exists. Everyone kind of has the same view, everyone says the same words, everyone goes to the same parties, everyone is chasing the same investors. Everyone is weird in the same way. The investors are all chasing the same companies. And it's just too much. I hate it. Like I actually just hate it. I hate being there. I hate hearing people talk there.

José Macedo (0:44)

All right.

Hi everyone. And welcome to another episode of the Emerging Managers Podcast. I'm José, and today I'm very excited to be here with Rohan Pujara, who's the GP at Valhalla. So Rohan joined Valhalla at 20 years old.

You raised during one of the hardest fundraising climates to raise a fund, 2022, after the blow-off top in tech. And honestly, you've absolutely crushed it with Fund One. You were just giving me some updates. K2 Space, Jaza, a bunch of others that I guess we'll get into.

Rohan Pujara (1:15)

Yeah. No, it's been really great. And big credit to my partner, David, for raising during that climate. It was not easy, but he's an extremely hard worker.

Yeah.

José Macedo (1:27)

And what I like about you is you're a really unique investor and you have genuinely original views, which is kind of rare these days. So and you also told me that my podcast isn't spicy enough. So I'm excited to get some spice out of you on this podcast. So yeah, man, really happy to have you here.

Rohan Pujara (1:43)

Yeah, I'm excited.

José Macedo (1:44)

So I want to start. The way I thought about it is going through some kind of Rohanisms of like things that I think you think differently about than other investors and just go through them sort of one by one.

I think the first one is I really see you as a contrarian. And you told me, I think, on our first meeting that you track what YC and the other big funds are, say, they're looking for and use it as a list of companies to exclude. Like you just won't take meetings with those companies. Why is that?

Rohan Pujara (2:12)

Yeah, and to be clear, we take meetings with any company. But I think the idea behind it is right now you have this dynamic in venture capital, especially at the early stage, where you have the consensus forms around these spaces.

And let's say like, let's take like the instinct example, right? You have like a category that forms. And then very quickly, all of the consensus investors chase that category. And then if a certain group of investors miss out, then they have to almost go create a competitor, right? And then you have the incumbents like right now Metta, right? Or OpenAI and Thropic, they're all going to come into that space. So, then you have this knife fight from day one. And then your early stage startups are all burning all their capital competing with each other from day one, which is not ideal, right? Because it's just a way to burn a lot of money, right? And I think there's, I think the cause of it is kind of a combination of incentive problem between, you know, LPs and GPs and this kind of short-term orientation. But also, I think the caliber of talent has shifted drastically in venture capital. And not only like, I think a lot of most people in VC today are very high-acute, very smart people, but the types of people that were doing this 30 years ago or 20 years ago, were risk takers, right? And then over time, as the job has become kind of a status symbol, a lot of these like, you know, Harvard, MIT, like the tier one, you know, credentialed people have come in and they tend to be more, I would say either status-driven or they're not, they're just more risk averse, right? And they want to do the thing, they want to be right with everyone else, right? What they don't want to do is be wrong when everyone else is right, right? So this fear of being wrong kind of drives all the decision making and so it drives this consensus. And so that's I think how I would like very briefly describe the problem.