The Remaking of Kleiner Perkins
After 50 years of dealmaking, the historic firm is back at venture’s top table. Sharp bets and renewed focus suggest Mamoon Hamid and Ilya Fushman’s KP may be heading for another golden generation.
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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.