A quick favor: If this email appeared in your “Promotions” tab, please drag it over to “Primary.” That’s the best way to make sure future pieces reach you!

Friends,

It’s been a heck of a week in the startup world. Because of the Silicon Valley Bank chaos, we decided to hold off on sending this piece on Sunday. I suspect many of you had more pressing concerns at the time. 

That means that we’re bringing you a briefing today, covering what I think is one of the most interesting case studies in venture capital: the remaking of Kleiner Perkins. Since taking the reins in 2017 and 2018, managing partners Mamoon Hamid and Ilya Fushman have overseen a renewal of the 50-year-old firm that is putting it back on top of the VC asset class. Their reboot comes after a decade and a half in which “KP” battled public perception and conflicting priorities.

It’s an exciting story of generational change, investing according to one’s strengths, and building a high performing team. It also happens to be full of the incredible anecdotes that only firms of Kleiner’s age and impact can boast. 

To learn more about the colorful Tom Perkins, incandescent John Doerr, legendary Mary Meeker, and “unassailable” Mamoon Hamid, jump in. 

Jump in

If you like this piece, I’d be very grateful if you’d give it a quick heart ❤️ on Substack. It’s great to know what resonates and it helps us with our growth on the platform! 

Brought to you by Composer

Is your portfolio out of tune?

Market volatility is like most Beethoven compositions - unpredictable and often conflicting. With potentially billions of dollars riding on the crest of inflation, today’s traders need to implement sophisticated algo-strategies to drown the sirens of uncertainty. 

Experience the music of investing with Composer’s smartest symphony (algo-strategy), Opus. Utilizing an orchestra of technology and data, this algorithmic masterpiece gives traders an edge by reacting to market fluctuations in real time. 

Like any major work of art, the outcome is the sum of its parts. Opus works by evaluating your individual portfolio for potential trades and balancing your portfolio to ensure the highest likelihood of success. To learn more about Opus and other algo-strategies visit composer.trade.

Invest better in 90 seconds

The Remaking of Kleiner Perkins

Actionable insights

If you only have a few minutes to spare, here’s what investors, operators, and founders should know about Kleiner Perkins.

• Back on top. In the 2000s and 2010s, the dominant narrative was that Kleiner Perkins (KP) had lost a step. New leaders Mamoon Hamid and Ilya Fushman have instilled a hungry, collaborative culture that has the firm back on fine form. Under their watch, Kleiner has invested in breakout businesses like Figma, Rippling, Glean, Viz AI, and others. 

• Refinding focus. Rather than adding new initiatives, KP has succeeded by streamlining. Over the past six years, the firm has wound down vehicles focused on cleantech, biotech, China, and growth investing, choosing to focus on early-stage investing. It represents a return to the fund’s roots. 

• A craft-approach. The last two decades of venture capital have been defined by a question: is this an asset class that can be industrialized? Can venture firms bulk up to the size of investment banks? KP has a definitive answer: no. Rather than running multiple teams, Kleiner is managed by just nine full-time investors.  

• A continuity plan. Kleiner has developed a strong investing core behind its two managing partners. In Bucky Moore, Annie Case, Everett Randle, and Josh Coyne, KP has a cadre of young partners familiar with the firm’s culture and operations – and capable of leading future generations. This continuity plan is a revival of the firm’s apprenticeship-based model.

• Encouraging results. Venture’s lengthy feedback cycle means we don’t definitively know how successful Hamid and Fushman’s stint at Kleiner has been. The early results look encouraging, though. Over the last five years, KP has logged an IRR of 65% and invested in leading businesses like Figma, Rippling, Glean, Productboard, Loom, and many more.

On August 3, 2017, Mamoon Hamid stepped into the sunlight.

Though not yet forty years old, the Pakistani-American investor had established a reputation as a razor-sharp dealmaker with the contemplative demeanor of an economics professor. After rising through U.S. Venture Partners ranks, Hamid partnered with Chamath Palihapitiya – then best known as Facebook’s growth agitator – to found Social Capital. Along the way, he’d invested in breakout companies like Slack, Front, Box, and Intercom while mostly managing to avoid the public eye. 

Hamid’s newest position had no such luxury. 

By joining as Kleiner Perkins’ newest managing partner, the financier stepped into venture capital’s stratosphere – where big moves always attracted attention. It was a fitting step for a man that had chosen to attend Purdue University because it had produced more astronauts than any other American college.

Even among Silicon Valley’s elite, few firms stand as tall as Kleiner Perkins. Founded in 1972, the same year as rivals Sequoia Capital, the original venture denizen of Sand Hill Road earned its reputation as a sterling activist investor with the chutzpah to incubate and invest at technology’s frontier. In its first few decades of operation, Kleiner built and backed remarkable businesses, including Amazon, Google, AOL, Compaq, Citrix, Tandem Computing, and Genentech.

It also established itself as an impressive spotter of founding and funding talent. Indeed, if venture funds abided by the constraints of basketball, limited to just five players, it would be hard to find a stronger line-up than Kleiner’s most famous names: the energy and maverick vision of John Doerr; the pugnacious cut and thrust of Vinod Khosla; Eugene Kleiner and Tom Perkins thinking, pacing, finding angles; and Mary Meeker towering in the post, finishing off move after move. (I hear the venture obsessives among you quibbling: Brook Byers and Frank Caufield are riding the bench? Really?)

When Hamid took the reins in the summer of 2017, Kleiner seemed far from those glory days. It was still one of venture capital’s august institutions, but there was the pervasive sense it was a firm on the decline. Younger, faster, larger competitors had usurped its position in the food chain; a much-touted cleantech experiment looked like a bust; and internal unrest suggested a team fraying at the edges.

When a great venture firm appoints a new managing partner often, the directive is simple: don’t screw it up. Here is a miraculous orb, burnished by time, that turns money into more money; don’t drop it.

The task before Hamid was not nearly so straightforward. He could not afford to keep Kleiner on the same path, to keep drifting, declining. What was needed was change, not stasis. It was a challenge that required managerial skill as much as investing acumen. 

Nearly six years in, the appointment of Mamoon Hamid seems to be paying dividends. Along with former Index partner, Ilya Fushman, hired in 2018, Hamid has shepherded Kleiner into what looks to be a new era of prosperity, defined by bets in Figma, Rippling, Loom, Glean, and others. Assuming Adobe’s $20 billion purchase of Figma is not blocked by the Justice Department, one of those investments is already set to deliver a generous return.

There is still time for it to go sour; venture performance is best measured in a decade or more. Looking beyond the numbers, though, Kleiner feels like an organization that understands itself again, knows the game it is trying to play. Much of that has been achieved by embracing the principles and playbook that made Kleiner great in the first place. 

How has Hamid done it? What did the managing partner do to renovate a fifty-year-old franchise? How did he leverage a golden history to create a firm built for the future?

Note: In addition to reviewing secondary information, we spoke with approximately a dozen different sources to build this piece, many with direct, intimate knowledge of the firm’s different eras. All have asked to remain anonymous.

Keep reading

Make a friend. Meet a co-founder.

The Generalist Community was created to bring together tech’s deepest thinkers. You might meet your next co-founder. You might meet a new investor. You’ll definitely meet new, like-minded friends. If you join today, here’s what you can expect this month:

1. A new round of curated introductions

   To help community members build high-quality professional networks, we make curated introductions every month. We’d love to include you when our next round goes live later this March. Who knows, you might just meet your future co-founder.

2. A fireside chat with Mike Duboe of Greylock Partners

   When you join The Generalist Community, you get access to the best and brightest minds in tech and finance. Later this month, we’ll be joined by Mike Duboe of Greylock Partners for a fireside chat. If you’re interested in venture investing or the art of growing a business, this talk is for you. Mike is an expert in sustainable growth and will be sharing insights from his time at Stitch Fix. We’ll also discuss how he works with companies today and where he sees opportunities ahead. 

Want in on March’s fireside chat and curated introductions? Join The Generalist Community today.

Become a member

Puzzler

​All guesses welcome and clues given to anyone that would like one. Just respond to this email for a hint. Today’s puzzler is one of my favorites from Tolkein: 

A box without hinges, key or lid. Yet golden treasure inside is hid.

Our last puzzle proved to be tricky, with a slimmed down crew of winners. Bruce G gathered the gold medal, followed by Shayon C, Laura F, Krishna N, Jonathan H, and Joshua K. 

What is it that no one wants to have, but no one wants to lose either?

The answer? A lawsuit. Another great answer one reader provided was one’s temper. Also a good fit.

We’ll be back on our usual schedule this week, which means we’ll see you again on Sunday!

Until next time,

Mario