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The rulebook for being a female investor: don't complain

The rulebook for being a female investor: don't complain


Casual sexism in the corridors of Kleiner Perkins

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Kimberly White/Getty Images

As soon as Wen Hsieh got on the witness stand during the Ellen Pao gender discrimination trial last week, it was obvious: this is the kind of guy who gets promoted at Kleiner Perkins Caufield & Byers.
Both Hsieh and Pao — who helped hire and train him — shared chief of staff duties for billionaire investor John Doerr at Kleiner, the Silicon Valley venture capital fund. Hsieh was promoted to senior partner in 2012, along with two other male colleagues. Pao, who is now the interim CEO of Reddit, was not. Her $16 million lawsuit against the once fabled, now faded investment firm is the most closely watched case in the tech industry right now.
In court last Wednesday, Hsieh grinned at the jury, hamming it up from the plaintiff’s first questions. Was Pao a better speech writer than him? "It’s hard to compete with a Harvard lawyer vs. a Caltech engineer!" What was it like joining Kleiner Perkins? "I didn’t even know how much I was paid until my wife told me." Did anyone show you the ropes? Partner Brook Byers asked him "to go to China to help source avian flu viruses ... people were dying at the time."

It was like The Aristocrats, except for model minorities

It was like The Aristocrats, except for model minorities. The courtroom, relieved after more than a day and a half of tense testimony from Doerr, ate it up. Doerr had been Pao’s mentor and champion, touting her achievements when the other partners tried to push her out. He paid for coaches to teach Pao how to be likable and "own the room." It didn’t work. The jury won’t hear the sound of Pao’s voice until she testifies later today, but from the plaintiff’s own witnesses, they were told she was too quiet, "resentful," "territorial," and "dismissive." Now here was Hsieh, owning.

What seemed to be lost on Kleiner Perkins management, including Doerr, is that Pao was set up to fail. She could've jumped through every hoop they put in front of her, but the firm was predisposed not to like her.

It was Doerr, the firm's paterfamilias, who said it best. When he was pressured by Pao's lawyer, he eventually spit it out: "What was un-partner-like" at Kleiner Perkins "is to complain." Doerr contrasted Pao with other female partners. Aileen Lee, he said, "never expressed that resentment" when she had to share chief-of-staff duties, like speechwriting. Kleiner's lawyer asked if Trae Vassallo, a former female partner at Kleiner who was let go in 2012, was a collaborative person. "Very much so," Doerr replied, pointing out instances where she did what was asked of her.

There are many types of men who make it — at least to the senior partner level — at Kleiner. But after two weeks of testimony, it seems like there is only one type of woman.

Loathed if you do, damned if you don't

Pao, however, was a complainer. She complained about Ajit Nazre, the influential junior partner she said "pressured her" into a brief, consensual affair in 2006. She complained for years when Nazre retaliated against her at the office. (Nazre wasn’t fired until 2012, after Vassallo reported sexual harassment, including the time Nazre showed up outside her hotel room in a bathrobe and slippers.) Meanwhile, Pao complained about being forced to give up a board seat and being passed up for promotion, which could have meant a five-fold increase in income.
Not long into Hsieh’s testimony, the jury learned why a bias against the squeaky wheel hurts women more than men. Pao felt she was asked to do a disproportionate amount of speechwriting for Doerr during her turn as "Team JD," while Hsieh was out seeking investments and sitting on company boards. Doerr said it was because Pao was a much better writer. But on the stand, Hsieh piped up that he was doing equivalent amounts of speechwriting a year or so into the gig. The imbalance was rectified, Hsieh said, after "Mr. Doerr was aware that she had complained."
Loathed if you do, damned if you don’t is a situation familiar to many women. Sheryl Sandberg, chief evangelist for leaning in, put a softer spin on the "likability" problem last week. "Women walk a fine line between competence and being liked in a way men don’t," Sandberg said.

Permissiveness towards male investors

Why are so many courtroom spectators agonizing over subtleties when Vassallo’s testimony established Nazre as a predator? For one, Pao is not suing for sexual harassment, but gender discrimination and retaliation. And over the past couple weeks, Kleiner partners past and present have brushed aside comments that painted a clear picture of the boys' club environment.

Did Pao have "a female chip on her shoulder"?Chi-Hua Chien, one of the male partners promoted instead of Pao, denied saying women "kill the buzz" (his explanation for hosting two all-male business dinners at Al Gore’s house.) Doerr did not recall telling an independent investigator that Pao had "a female chip on her shoulder," even though the investigator corroborated it on Thursday. So Pao’s lawyers have been left parsing years of performance reviews and internal emails for hidden barbs and gender bias. These administrative artifacts are helpful.

Compare feedback given to Pao versus that given to Hsieh. She was told she’s too negative, too resentful, comparing "a weekly timecard" with Hsieh, and too concerned with being "personally credited" for the work she does. Hsieh was told to stop being "too optimistic," that he’s "spread too thin," and that he gets "undue credit" for successes that are not his.

Pao’s territoriality makes sense if her male co-worker is automatically handed more credit than he deserves. Of course she would bristle against what Sandberg calls "office housework," if Hsieh was spread too thin doing all the fun stuff. But even Doerr, who said all the right things about diversity and came across as more empathetic than anyone, seemed bothered by that. In one dismayed email, he made a list of all the things Pao "resents." Only thought leaders can climb the venture capital ladder
Gendered reactions do not mean Pao deserved a promotion. Kleiner's defense is arguing that Pao was simply not qualified. Hsieh, with his PhDs, was a thought leader on emerging technology. Pao did not get a board seat at RPX, a successful patent company she had championed, because it was given instead to senior Kleiner partner Randy Komissar, who had worked on intellectual property law at Apple.

But Kleiner's argument sounded less convincing when other male partners were added to the mix. Chien was arrogant, something "perceived across the partnership," according to Hsieh. Pao had been told her electrical engineering degree from Princeton and JD and MBA from Harvard didn’t make her as "sought after" as Hsieh’s two PhD’s from Caltech. But Ted Schlein, a managing partner and Pao’s supervisor, only has a bachelor’s degree in economics from University of Pennsylvania.

Then, of course, there’s Ajit Nazre. He’s the exception that proves Kleiner’s rule of what is tolerated from male partners. Nazre was protected by Ray Lane, now a partner emeritus, who pushed to have him promoted even after Nazre lied to him about the affair. His bonus was docked $22,000, and he stayed at the firm for almost six more years. When Vassallo spoke with the investigator about her sexual harassment claims, she said he had been "preying on other female partners."

Fitting the pattern for a female investor

The buzzword "pattern-matching" came up so often in the past couple weeks that the jury asked Doerr to define it. Venture capitalists use pattern-matching to mitigate the risk of investing someone else’s millions in a startup when no one knows if it will turn into Color or Uber. If a certain type of founder has been successful in the past, VCs tend to think they should find a dude — it is always a dude — who matches that pattern.

Pao’s attorney Alan Exelrod tried to demonstrate just how ingrained those patterns can be by including a snippet of audio from a national venture capital conference in 2008 where Doerr was the keynote speaker. After hours of hearing about Doerr’s commitment to increasing the number of women in the industry, jurors listened to a tape of Doerr saying that the most telling "success factor" in "the world’s greatest entrepreneurs" is that "they all seem to be white, male nerds who’ve dropped out of Harvard or Stanford and they absolutely have no social life. So when I see that pattern coming in — which was true of Google — it was very easy to decide to invest." Looking out for male nerds is not unique to Kleiner

Looking out for male nerds is not unique to Kleiner. In fact, Paul Graham, founder of Y Combinator, the Stanford of Silicon Valley incubators, has made similar comments about founders who look like Mark Zuckerberg. Ben Horowitz, founder of the Andreessen Horowitz, the biggest brand name in venture capital, has said that about college dropouts. All three — Doerr, Graham, and Horowitz — are known for their efforts to make tech more diverse.

But what do VCs picture when they think of a successful female investor, besides a likable non-complainer? That’s less established, but gender is at the forefront. Some instances of borderline sexism seemed to be inserted with no malice, but couched as discussions about family.

Vassallo, for example, first brought Nazre's unwanted advances to Lane's attention. His response was to suggest she talk it over with her husband before she complained. Lane insisted that he was "insulted" when Pao's attorney asked if he didn't trust Vassallo to make her own decision. "Unless/until she becomes a mom"
Doerr too introduced women’s family status into the professional sphere. In an email from 2008 about a job candidate named Amy Chiang: "Her willingness and interest in traveling the world" was a "big plus," Doerr wrote, clarifying "her willingness to travel works, unless/until she becomes a mom." In an email Pao sent Doerr about not getting the RPX board seat, she wrote: "you recommended against it, because I would be on maternity leave." There was one other email written to Tina Ju, a well-established investor in China, recruited by Kleiner Perkins. This is how Doerr described her in an email from 2007: "Tina is a highly respected female senior partner with proved venture experience. Patient, firm, savvy founder of firm, VC investor, and mother of two young kids." Doerr tried to justify all of them. He was proud of the fact that Ju worked "7 by 24." He insisted it was because Komisar had all that IP experience at Apple.

In the end exposing these kind of inherent biases, even among those with good intentions like Doerr, might be the case's biggest legacy. The claims made in Pao's complaint are very hard to prove for the same reasons that all of the examples above will be debated in the comments. The sexism is implied and not overt. As Doerr himself volunteered, the number of women in venture capital is "pathetic" and getting worse. Perhaps if Pao exposes the pattern that Silicon Valley doesn't acknowledge following, then the industry can start looking at the data to see if its assumptions are right.