Gary Rivlin of the N.Y. Times has inaugurated what is apparently going to be a monthly piece on the venture industry with a fairly savage article. He implies that the U.S. venture industry remains over-staffed, and venture tourists are still ensconced everywhere. He even names some high-profile flameouts, calling Stewart Alsop (NEA), David Beirne (Benchmark), and Mitchell Kapor (Accel) flops as VCs.
Fair enough. Venture capital isn’t easy; there is a lot more money out there than there was ten years ago; and many partners at venture firms still don’t understand that neither being technically adept nor being money-hungry are the proper prerequisites for being a good VC.
Far better is to be a charming assassin, a consummate networker, and an able market-timer, someone who has a golden gut for market inflections and who has a Blackberry full of CIOs, CEOs, venture guys, and technologists that would literally cause other VCs to get as horny as Gawker readers learning of a newly-found Paris Hilton Sidekick.
Anyway, I like Gary, but let’s figure out what, if anything, is new here. Well, the accumulated evidence may convince a few venture firms to unload a few more late-1990s venture tourists, which would be good. And there are a couple of factoids with which I was not familiar, for example:
Consider Kleiner Perkins Caufield & Byers, widely viewed as one of the two premier venture outfits in Silicon Valley.
In February 2004, Kleiner began a $400 million fund, but it isn’t managed by any of the half dozen or so of the partners who worked for the firm in the late 90′s; they had either left the firm or been relegated to secondary roles. Kleiner has hired three new managing partners since the start of the year.
Interesting, but something seems funny here. Brook Byers is still at Kleiner, as is John Doerr, and others, so what does Rivlin mean? Yo, Gary?
[Update] One more thing. The following quote from the piece is going to have a lot of paranoid partners doing weekend math on their personal profit contribution:
Two-thirds of the partners who were at [venture firm] N.E.A. in 1997 are no longer at the firm, [founding partner Dick Kramlich] said, and then cited an internal study that went a long way in explaining why: the surviving third accounted for 85 percent of the firm’s profit. [Emphasis added]
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