Like many, I have been following the Ellen Pao vs. Kleiner Perkins saga.
Last week, New York Times had a report on it that has a brief mention of the key issue, in my opinion, that no one else seems to be highlighting:
Kleiner has had about 24 junior partners in its history, Mr. Doerr testified. Most of them were male. Most of them did not make it to the inner circle.
“What’s unusual, what is truly unusual, is for a partner to be promoted,” he said. “It’s happened only five times in the 30-year history of the firm.” The others, he said, were asked “to move on.”
And this is the crux of the matter: in the Venture Capital industry, General Partners seldom get promoted from the ranks of analysts, principals, and junior partners. A long time ago, it used to happen from time to time. Nowadays, almost not at all.
I am not sure what VC firms tell talented young people when they recruit them in such roles. I am not sure what promises they make. I am not sure what misrepresentations and baseless expectations they set.
The fact of the matter is this: if you have aspirations of becoming a General Partner at a VC firm, do NOT accept to be an underling at one of them.
Go become an entrepreneur.
Do not sit at a VC firm and waste your best years becoming unemployable.
Yes, that’s what happens.
Unless you do it for a short while, and then leverage the contacts and go take an operating role relatively early in your career.
And oh by the way, this lesson applies to both women and men.
The Ellen Pao vs. Kleiner Perkins saga has become a lightening rod for a perfectly valid discussion on sexism in the industry.
The judge in the trial, which opened on Feb. 23, is allowing the jury to question the witnesses. One anonymous member of the jury put it well this week when he or she asked the star witness, John Doerr, perhaps the most famous and successful venture capitalist in the world and Ms. Pao’s former boss, this question: Were women simply not interested in becoming venture capitalists, “or did the venture capital world fight them off?”
In essence, Mr. Doerr said, it was not his fault. Venture capital firms draw from successful companies, and few entrepreneurs are women. It is a very slow process to change, although Mr. Doerr agreed that the percentage of female venture capitalists was “pathetic.”
Yes, it is totally pathetic.
The essence of the case, however, is not sexism.
It is that young, talented people go into a career without a full understanding of the industry’s norms.
Inevitably, they get disappointed.
And the young men who go through this experience cannot sue their respective venture firms on the grounds of discrimination either.
Bottomline: to be a successful venture capitalist – a General Partner with full carry participation in the firm’s compensation model – you should not start at the ground floor of that firm.
There is no ladder up to the top.