There’s plenty of debate on whether companies should work remotely or in-person, but a prominent fund doesn’t fund any companies that are completely remote.
Keith Rabois, general partner at Founders Fund and former executive at PayPal, LinkedIn, and Square, has drawn a hard line on remote work. Speaking at a conference in 2023, Rabois revealed that Founders Fund maintains a strict policy: they will not fund companies that don’t work in person. His rationale is rooted in over 13 years of company-building experience before becoming a VC, and his conviction is striking in its firmness.
The Airbnb Litmus Test
Rabois recounted a revealing moment at last year’s Summit conference. “I was sitting next to Joe Gebbia from Airbnb at lunch, and it was the same week that Airbnb announced this remote everything policy,” Rabois said. “So I said to Joe, if you were starting Airbnb again, would you ever do this? And he said, no. And I said, QED, I’m done.”
The implications were clear to Rabois: if one of the co-founders of a successful company wouldn’t choose remote work for a new venture, that settled the debate.
The Undiscovered Talent Problem
At the heart of Rabois’s argument is the concept of “undiscovered talent”—early-career employees who are still learning their craft. “The way you learn a craft is by osmosis,” Rabois explained. “And osmosis and unstructured learning does not work remotely.”
This creates a fundamental tension for startups. Companies can either hire very experienced people with a linear roadmap that’s predictable, allowing them to know exactly what kind of talent they need. “But that’s pretty rare in most companies that really succeed,” Rabois noted. Most successful startups are built on the backs of ambitious, less experienced people who grow rapidly with the company—and that growth, he argues, requires in-person interaction.
Rabois acknowledged there might be one exception every ten years, but concluded that Founders Fund should simply have a policy against funding remote companies. He did draw a distinction between remote work and distributed offices where everyone works in person but from different locations—the latter is acceptable.
The Promotion Signal Problem
Perhaps Rabois’s most interesting argument centers on promotion decisions. “I actually wouldn’t even know who to promote” in a remote environment, he said, pointing to the subtle signals that inform these critical choices.
He offered a vivid example from PayPal: “We had this 29-year-old finance guy who’s a little annoying sometimes, but very talented, and Peter made him CFO at 29 years old. His name: Roelof Botha.” Today, Botha is a prominent venture capitalist and partner at Sequoia Capital. “There’s no way he would have got promoted at a remote company because the signals that led to Peter concluding that this would actually work are these little soft, interactive signals that you watch with your eyes.”
Rabois shared another example from his own company, OpenStore. His “probably number two person” was hired as the most junior person in the company. “He’s been promoted five, going on six times. There is no chance—he’s now 29, he will be a fabulous CEO, whether my company or some other CEO, definitely in his career—there is no chance he could have gone on this promotion ladder without me being able to watch how he interacts with other people and see how people trust him and go to him to solve problems. His whole career trajectory is completely different because he joined an in-person company.”
The Broader Implications
Rabois’s stance represents a growing counter-narrative to the remote work revolution that accelerated during the pandemic. While companies like GitLab and Automattic have built successful fully-remote organizations, many prominent tech leaders have called employees back to offices. Meta, Amazon, and Google have all implemented return-to-office mandates in recent years, with Amazon recently announcing a full five-day office requirement starting in 2025.
The debate extends beyond individual company policies to the venture capital level. If major funds like Founders Fund refuse to invest in remote startups, founders face a stark choice: embrace in-person work or potentially lose access to significant capital and expertise. This could reshape the startup landscape, particularly for companies in expensive tech hubs where remote work offered a way to access talent without the costs of relocation.
Yet Rabois’s argument is not without its critics. Proponents of remote work point to broader talent pools, reduced overhead costs, and the success of remote-first companies as counterexamples. They argue that structured mentorship programs, intentional communication practices, and modern collaboration tools can replicate much of what happens organically in offices.
Still, Rabois’s focus on the “soft, interactive signals” and the career trajectory of undiscovered talent raises questions that go beyond productivity metrics. Can a 22-year-old learn to become a great executive over Zoom? Can a VC spot the next Roelof Botha through video calls? For Founders Fund, at least, the answer is no—and they’re willing to pass on investments to maintain that principle.