Why a former Khosla partner who was one of the first investors in Groq is striking out on her own

In a bold move amidst a tightening venture capital landscape, Sandhya Venkatachalam, a former partner at Khosla Ventures and an early investor in chipmaker Groq, has established Axiom Partners. With a focus on unconventional investments in nascent AI startups, Venkatachalam aims to uncover groundbreaking companies that challenge the status quo. "Being contrarian and wrong is almost pointless; being contrarian and right is the ultimate goal," she asserted. In a time when many venture firms are retrenching, she is taking a different path, launching her inaugural fund with $52 million aimed at high-risk, high-reward investments. Venkatachalam believes that the current market is flooded with large firms targeting established AI infrastructures, leaving little space for innovative startups that can redefine industries. With investment amounts ranging from $100,000 to $2.5 million, Axiom Partners is committed to supporting visionary founders who foresee how AI will transform sectors, even when mainstream opinion diverges. "I’m keen to back entrepreneurs with a unique perspective on the future and who are leveraging AI to create the next wave of transformative companies," she explained. Venkatachalam is also cautious about the current trends within AI application companies. She predicts that while significant players will emerge in areas like HR, cybersecurity, and sales, true innovation often comes from outside existing categories. "We aim to discover new categories," she stated, emphasizing the need for early-stage investments and strong conviction in founders. Despite facing challenges in the current venture capital environment—where institutional investors are cutting back and emerging managers struggle to secure funds—Venkatachalam has managed to slightly surpass her fundraising goal, attracting $52 million from various limited partners, including major venture firms and family offices. Some investors are interested in her deal flow, while others are eager to understand how AI will evolve their businesses. "These investors are like test subjects for the technology," she noted, highlighting their role as both advisors and potential customers. Influenced by Vinod Khosla, who was an early supporter of OpenAI, Venkatachalam emphasizes the importance of identifying great founders based on their vision rather than mere credentials. Her approach favors non-consensus investing, which Khosla famously championed, as seen when he backed OpenAI in its early days when it was perceived merely as a nonprofit initiative. "I don’t seek unanimous agreement; a solid, defendable thesis is what I value," she remarked. Axiom Partners has also welcomed two partners: Evan Morikawa, former head of applied engineering at OpenAI, and Kipp Bodnar, HubSpot's CMO. Serial entrepreneur Paolo Perazzo will lead the firm’s AI initiatives. "We’ve assembled a remarkable team of experts in AI, which enhances our capabilities," she added. As the sole general partner, Venkatachalam retains the final decision-making power, allowing her to navigate the fast-evolving venture landscape with agility, a crucial advantage in today’s dynamic environment.