Kleiner, Perkins, Caufield and Byers, the most famous of all the Silicon Valley venture capital firms, got off to a rocky start, according to co-founder Tom Perkins in his book Valley Boy.
Having fallen short of raising their target of $10 million in 1972, Eugene Kleiner (one of Bill Shockley’s ‘Treacherous Eight’ founders of Fairchild Semiconductor) and Perkins set up shop on Sand Hill Road with a fund of $8 million.
Half the money had come from a Pittsburgh billionaire called Henry Hillman, and Bob Noyce and Gordon Moore, co-founders of Fairchild Semiconductor and Intel, had put in $200,000 each. But, having got their fund, no one came calling.
A few business plans trickled in, and Kleiner and Perkins learned to avoid reading those written in crayon. "We knew that these were frrom inmates in mental institutions, and the staff didn't trust the writers with anything sharper," recalls Perkins. Nothing was proposed which seemed worth backing.
So Kleiner and Perkins put some of their cash into a printer firm called Qume which was an investment of another VC company called Sutter Hill. It did OK.
The crunch came when they had to find an investment on their own. It was a semiconductor company. Kleiner and Perkins’ investment money “drained away like water poured onto desert sands”, remembers Perkins.
Almost unbelievably the next two investments were a company which re-soled tennis shoes called Tread-Two, and a company which converted motorbikes into snowmobiles called, of all things, Snow-Job. Unsurprisingly, both failed.
Then Kleiner and Perkins hit on the idea of founding their own start-up company. Perkins wrote a business plan for a fail-safe computer company and failed to get it named Datadyne. His colleagues preferred the name Tandem Computers.
Kleiner Perkins was on its way.
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