The Real Reveal in the Kleiner Case

400“Pao didn’t have the necessary skills for the job. She didn’t even come close.”

So said employment attorney Lynne Hermle yesterday in her opening comments about Ellen Pao, the CEO of Reddit and a former partner of Kleiner Perkins Caufield & Byers, the storied venture firm that Pao is suing for gender discrimination and retaliation.

We don’t want to underestimate Hermle, who is notoriously tough and is presumably just getting warmed up. (The trial is expected to last four weeks.)

Still, her strategy seems risky, given how unclear it is what skills are “necessary” to becoming a great venture capitalist.

Certainly, Pao’s educational background is textbook, with degrees from Harvard’s business and law schools, not to mention an undergraduate degree in electrical engineering from Princeton. Pao also logged time at Microsoft, TellMe, and BEA Systems, giving her the kind of operating experience that is often (but not always) a prerequisite for the job.

We’ll spare you the laundry list, but we could probably come up with hundreds of general partners with similar backgrounds. Among them: famed VC Jim Breyer of Accel Partners, who had part-time jobs at Hewlett-Packard and Apple, as well as a stint as a McKinsey consultant, before nabbing his MBA at Harvard and heading straight into Accel.

Still, Hermle might argue, there’s much more to venture capital than education. In fact, she is already beginning to paint Pao as highly political, citing performance reviews that state Pao “seems to have a sense of entitlement rather than earning her position” and is “not viewed as a good team member” and “not 100 percent reliable” in supporting her colleagues. (Indeed, one detail that surfaced yesterday was that Pao suggested that Kleiner fire Trae Vassallo, a former Kleiner colleague who helped to lead deals in Nest Labs and Dropcam, among others.)

The implication seems to be that trust and respect within a venture firm are key. And in theory, it’s easy to see why. No one wants to work with a backbiter.

Unfortunately, backbiters are sometimes also rainmakers, and in venture capital, returns are the name of the game.

Yes, it’s nice if you can find team members who are both supportive and know how to produce fat returns, but that’s not always the case. Because of the typical pay structure within a firm — with certain partners receiving far better economics than others — it’s often not so easy to be diplomatic, either.

The truth is that what goes on inside most venture firms isn’t nearly so collegial as GPs would have their LPs believe. They may talk about chemistry; they may applaud each other publicly. But when it comes down to it, venture capital is as cutthroat a business as you’ll find. You make money for investors or you get kicked out — and anyone who has been around long enough can tell you that everything else is a façade.

Much has already been written about Ellen Pao and whether and what her case against Kleiner tells us about gender discrimination inside venture firms.

What’s more likely to be revealed in this very public case is that partnerships are far more fragile than the industry would have us believe.

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