mannerisms

Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.

When A VC Was Too Specific

The premier VC company in Silicon Valley, was started by Eugene Kleiner and Tom Perkins over breakfast at Rickey’s in Palo Alto in 1972.

Each man put up $100,000. The new firm became the first VC tenant of property developer Tom Ford who had built offices on Sand Hill Road.

Early pitches to potential investors were hairy.

Kleiner made the mistake of telling one investor who asked what they’d be investing in that they were looking at a proposal to develop a word-processing typewriter.

“He threw us out,” Kleiner tells David Kaplan in his book ‘The Silicon Boys’, “he didn’t even give us lunch. He thought we’d be crazy to compete with IBM. That was the last time we mentioned a specific idea.”

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4 Comments

  1. david manners
    May 27, 2014 11:43

    Yes Stooriefit, you hear nasty stories of how the venture people appear to give stock to employees but use complicated techniques to make sure they can never benefit from it. Like so many things it was a productive, relatively honest, system which has been corrupted by greed.

  2. Stooriefit
    May 27, 2014 08:25

    My mistake I say Kleiner and thought KKP, whereas that would be Kohlberg or Kravis … I should remember – always read the question!

    As you say – Kleiner’s modern ilk have a reputation for Vulture rather than Venture now though.

  3. david manners
    May 26, 2014 18:50

    Well Stooriefit, without VCs there would have been no Fairchildren and without the Fairchildren semiconductor tecnology would have remained the preserve of big business and IMHO wouldn’t have developed so quickly and so ubiquitously. But, more recently, in a more venal age, they have, as you say, become rascals.

  4. Stooriefit
    May 26, 2014 10:45

    I’m sure in the intervening 40 years their investment decisions haven’t got any better, just their patter.

    You get ripped off by these charlatans one way or another – if you’re wealthy they’ll scam you by selling you their secret investment sauce, if you’re not you get rogered because you’re working for one of the respectable businesses the PE brats flay on their behalf.

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