Ellen Pao’s lawsuit against Kleiner Perkins has captivated Silicon Valley with its stories of the male-dominated world of venture capital.
Pao is seeking $US16 million from Kleiner and says she was discriminated against while working there. Kleiner has denied Pao’s allegations; its lead attorney Lynn Hermle has repeatedly emphasised that Pao didn’t have the necessary skills to become a successful venture capitalist.
The trial is far from over, but here are some of the most shocking revelations we’ve heard so far:
- Top VC firm partners make an insane amount of money. They usually get a percentage of their firm’s “net fee income,” the profits left over after operating expenses and investors are paid. Sue Biglieri, Kleiner’s CFO, testified that some partners made two to five times more money as a general partner than a junior partner (like Pao was). Ellen Pao made about $US516,000 at Kleiner in 2011, but she could have made as much as $US3 million a year as a general partner. That lost net fee income is part of why Pao is seeking $US16 million in damages. Interestingly, Pao was made an investing partner at Kleiner even though at least one partner didn’t think she’d be very good at it.
- There were several tales of a locker room atmosphere. On a private jet trip with partner Ted Schlein and Dan Rosensweig, the CEO of Chegg (a Kleiner investment), Rosensweig allegedly talked about visiting the Playboy mansion and wanting to go to a Victoria’s Secret show. Rosensweig also allegedly said he wanted Yahoo CEO Marissa Mayer to join Chegg’s board because she was “really hot.” But Schlein didn’t do much to rein in Rosensweig. “I don’t remember trying to stop it,” he said.
- Another female partner testified she was harassed at Kleiner. Trae Vassallo, a former partner, testified to her sexual harassment complaints against another former Kleiner partner, Ajit Nazre. Vassallo claimed Nazre had pursued her once in 2009, and again on a business trip in New York in 2011. Nazre allegedly promised to introduce Vassallo to someone who could help her with one of her ventures at a dinner, but that person never showed up. After the dinner, Nazre showed up at Vassallo’s hotel room in a bathrobe and slippers. “I eventually pushed him out and closed the door,” Vassallo testified. After an independent investigator found Vassallo’s claims were justified, the firm fired Nazre.
- Women seem to have a harder time getting promoted. In 2008, Doerr said on stage in a panel with Sequoia’s Mike Moritz that the best tech entrepreneurs were usually “white, male, nerds.” Doerr’s conversation with Moritz was played in court by Pao’s attorney. The implication was that Doerr had an implicit bias against women, though he lamented the “pathetic” lack of women in venture capital in his testimony. Two former female partners at Kleiner — Mary Meeker and Aileen Lee — had a harder time getting promoted than other men at the firm. Lee never became a senior partner at Kleiner and instead founded her own VC firm, Cowboy Ventures. Pao’s attorneys have also tried to imply that women were excluded at Kleiner. Chi-Hua Chien, another former partner, organised an all-make Kleiner ski trip to Vail as well a dinner with Al Gore where only men were invited.
These stories may not be enough to prove that the firm discriminated against Pao — that requires specific types of evidence, and there was lots of other testimony about performance reviews that may be more relevant there. But they do shine a light into the day-to-day struggles that many women face in traditionally male-dominated businesses and industries like finance.
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