In January, reports surfaced that Social+Capital was in “acquisition” talks with Kleiner Perkins Caufield & Byers. Those talks fell apart.
So what happened?
TechCrunch has heard from a few people familiar with the discussions about what might have led to the deal falling through. Kleiner Perkins had originally approached Social+Capital (or S23P), and as the conversations progressed, Chamath Palihapitiya — the founder of S23P who made a fortune off the Facebook IPO — and his team wanted to come in and essentially reorganize and run Kleiner Perkins, sources said.
John Doerr and the rest of the partnership, according to our sources, did not like Palihapitiya’s and S23P’s plan.
Kleiner Perkins was founded in 1972 with a storied history of highly successful investments (though, not so much during its stint investing in clean technology). Doerr joined in 1980 and had led investments in some of the most successful companies in technology. The idea of bringing in a new team to essentially rebuild the firm, after a series of snafus involving one of its founders, Tom Perkins, and the gender discrimination lawsuit filed by Ellen Pao, was not something that they found appealing.
At the very least, the idea doesn’t sound that radical. S23P has had success recently, and has fresh blood. The firm invested in Box, which went public last year, and Yammer, which was acquired by Microsoft for $1.2 billon. In addition, S23P invested in Slack, a hot enterprise collaboration startup that was recently valued at $1.12 billion.
Kleiner Perkins, meanwhile, has tried to find its way into more modern investments like Snapchat, Instacart, Houzz and also Slack. But the firm has found itself making its way into the rounds at late stages. It has missed the early stages of many major popular consumer apps — including Twitter, for example. Kleiner Perkins only invested in the company in a much later round.
Doerr’s last big “win,” arguably, was Google. He even acknowledged at Ellen Pao’s gender discrimination trial that he “needed some wins.” And yet, Doerr had, since Google, created a wall of sorts around him with “Team JD,” a revolving chief of staff role that included Pao. But over time Team JD focused more on clean technology, further pushing Doerr out of touch with the consumer Internet space.
Perhaps Palihapitiya, with fresh ideas, wanted to do away with the Team JD structure? With running the firm off the table, talks between S23P and Kleiner Perkins fell apart.
Despite the uncertain future of Kleiner Perkins, Doerr and his partners still want to maintain control of the firm. Their success depends on the outcome of its investments and on a team and a brand that has been driven through quite a bit of mud in the past year.