joi, 5 martie 2015

In Ellen Pao’s Suit vs. Kleiner Perkins, World of Venture Capital Is Under Microscope



SAN FRANCISCO — Speak up — but don’t talk too much. Light up the room — but don’t overshadow others. Be confident and critical — but not cocky or negative.


Ellen Pao got a lot of advice about how to succeed in the clubby, hypercompetitive, overwhelmingly male world of venture capital. Her annual evaluations were filled with suggestions about how she could improve and perhaps even advance to the inner circle of Kleiner Perkins Caufield & Byers, the blue-chip firm where she was a junior partner. She would be paid millions and be at the red-hot center of the crucible of the tech economy.


Ms. Pao did not make it. Exactly why is the subject of a lawsuit she filed against Kleiner and which is now being heard in civil court here. Ms. Pao contends she was harassed and then discriminated against. Kleiner says she failed to improve despite all that coaching and was terminated.


At risk is the millions that Ms. Pao might have earned at Kleiner, plus millions more in punitive damages. But that is pocket change in Silicon Valley. What is really under examination in this trial is the question of why there are so few women in leadership positions in the valley. At stake is any hope that Silicon Valley can claim to be a progressive place.


In an unusual move, the judge in the case is allowing the jury to question the witnesses. One anonymous member of the jury put it well this week when he or she asked the star witness John Doerr, perhaps the most famous and successful venture capitalist in the world and Ms. Pao’s former boss, this question: Were women simply not interested in becoming V.C.s, “or did the venture capital world fight them off?”


In essence, Mr. Doerr said, it was not his fault. Venture capital firms draw from successful companies, and few entrepreneurs are women. It is a very slow process to change, although Mr. Doerr agreed that the percentage of women V.C.s was “pathetic.”


Mr. Doerr, who backed Amazon and Google and whose net worth is estimated by Forbes at $3.5 billion, came across as an ambivalent figure during his hours of testimony.


Ms. Pao, now 45 and interim chief of the social media site Reddit, was somewhere between Mr. Doerr’s protégée and surrogate daughter. He promoted her, encouraged her and defended her after his other colleagues soured on her. And his interest in having more women in technology seemed genuine.


On the other hand, he told the outside investigator hired by Kleiner that Ms. Pao had “a female chip on her shoulder” and that she was someone who, in a lawyer’s paraphrase during the trial, “seems to always blame the other person for the fact that their relationship ended.”


He also said he never read the report of the outside investigator, saying it was summarized for him.


Documents and testimony in the trial show a firm hustling to develop technologies being dreamed up in garages across the valley, but whose attitudes derived from an earlier era. When the outside investigator asked for a copy of Kleiner’s manual on discrimination, it could not be found.


Kleiner is only a few miles from Facebook, where the chief operating officer Sheryl Sandberg wrote a rather popular book telling women to “Lean In,” by, for instance, seizing a seat at the table during meetings instead of hanging back at the edges.


Not many people at Kleiner appear to have heard of such notions. At one meeting discussed in the trial, Ray Lane, a senior partner, needed someone to take notes. He asked Ms. Pao, who said no, and then another female junior partner, who said no. He was surprised.


Kleiner offers employment statistics to say it is more receptive to women than most venture firms, but clearly the women do not have an easy time of it there. Ms. Pao began at Kleiner in 2005 as Mr. Doerr’s chief of staff. She had a consensual affair with a married junior partner, Ajit Nazre, that ended badly.


Ms. Pao’s suit maintains that Mr. Nazre was in a position to retaliate against her, and did so, and that her position at the firm suffered when she complained.


Mr. Nazre later approached Trae Vasallo, another junior partner, on a business trip, showing up at her hotel room door wearing a bathrobe and carrying wine, Ms. Vasallo testified. She rebuffed Mr. Nazre and complained to Mr. Lane.


“I feared somewhat for her safety,” Mr. Lane testified. Later he underscored his worries, adding: “This could have gone in a different direction. He could have pushed his way into the room.”


Mr. Lane conceded his response to Ms. Vassallo’s complaint was less than decisive. He asked her if she really wanted to go public. He asked her if she had talked to her husband.


“I made a mistake,” he told the court. “I cared more about her feelings than anything else.”


Mr. Lane also jokingly told Ms. Vasallo she should be “flattered” for Mr. Nazre’s attention, Ms. Vassallo testified. He denied having said that.


The men and women sitting in judgment of all this behavior look nothing like what Silicon Valley would label a jury of its peers. Instead of being young and white and male with a sprinkling of Asians — what critics say is the furthest limit in Silicon Valley in terms of diversity — the jury is half female and substantially Hispanic and black.


They are hearing about a world distant from that of most Americans. Ms. Pao, a Harvard-trained lawyer with deep experience in the tech field, was initially paid $220,000 a year, plus 30 to 60 percent of her base salary as a bonus, plus much more as her share of Kleiner’s funds. Ms. Pao is expected to testify by the end of the week.


In return for this, she was expected to do whatever she was told, according to testimony and emails shown at the trial. She polished a speech for Mr. Doerr on her honeymoon. When he recommended a book, she wrote the blurb. She worked so much that he begged her to stop, writing her at one point to “please, please really take a real leave. You deserve it!”


Kleiner has had about 24 junior partners in its history, Mr. Doerr testified. Most of them were male. Most of them did not make it to the inner circle.


“What’s unusual, what is truly unusual, is for a partner to be promoted,” he said. “It’s happened only five times in the 30-year history of the firm.” The others, he said, were asked “to move on.”


One of the five who made it was Wen Hsieh, who joined as a junior partner in 2006. Mr. Doerr saluted Mr. Hsieh, saying “this guy bleeds for Kleiner.” For a photo shoot, Mr. Hsieh gave Mr. Doerr the shirt off his back. He moved his family to China even though they did not want to go.


Mr. Hsieh’s testimony involved a lengthy examination of his annual evaluations, which had as many recommendations for improvement as Ms. Pao’s.


“Wen needs to speak up more and be willing to challenge our thinking,” one review said. But another review said: “He tends to fill every vacuum with his voice.”


These contradiction were “hard to weigh,” Mr. Hsieh told the court. And in any case, he had no time to discuss them further: He was flying to China that night.




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