VC Legend John Doerr takes Stand in Sex Discrimination Case

John Doerr (Matt Rourke / Associated Press)
Matt Rourke / Associated Press
Newport Beach, CA

As the globe’s top venture capitalist, John Doerr of Kleiner Perkins Caufield & Byers has funded and mentored tons of start-up Silicon Valley companies that became fantastically successful, including Google, Amazon, Intuit, and Electronic Arts, Twitter, Square and Zynga. But one of his worst bets may turn out to be personally hiring Ellen Pao in 2005. Pao is dragging Doerr into her lawsuit for $16 million for sexual discrimination after 7 years at the firm.

When Pao was hired at KPCB, she had an impressive résumé: graduating from Princeton University with a degree in Electrical Engineering in 1991; Harvard Law School in 1994; two years as a corporate attorney at Cravath, Swaine & Moore from 1994 – 1996; back to Harvard Business School for an MBA; and four years in Silicon Valley tech. She joined KPCB in 2005 with a starting salary of $200,000. She collected $100,000 bonuses annually and was regularly promoted. Pao became a partner and earned $400,000 by 2012, plus bonus. Pao was on the ladder to make senior partner at the firm, where she might make $1-to-$3-million a year.

But as she was leaving in 2012 to be CEO of the viral chat room Reddit, Pao turned down a $400,000 KPCB severance and filed a $16 million sexual discrimination suit.

Pao alleges that Kleiner Perkins did not promote her quickly enough due to her gender, ignored her complaints about being harassed by some KPCB partners, and then fired her in retribution after she filed her lawsuit against the firm.

John Doerr testified under oath this week, in a grueling 7.5-hour testimony with Pao’s attorney, Alan Exelrod, that he hired Pao and had been her mentor. Doerr answered questions about Pao’s personality and work ethic, the stress of the venture capital business, and how he tried to respond to complaints Pao and other women lodged against their male colleagues at KPCB.

Doerr was adamant that he fought for Pao to stay and continue to be successful at the firm. “I didn’t want her to go,” he said. “I wanted her to stay.” But he also admitted that he had to regularly warn Pao about how she callously treated her colleagues. Pao “was not regarded as a team player,” in Doerr’s opinion.

In opening arguments last week, Exelrod said that during Pao’s tenure, none of the managing partners at the KPCB were female. Exelrod emphasized that, at the time Pao left Kleiner Perkins in 2012, only one woman had been promoted from junior partner to senior partner, though a few women had been hired in as senior partners.

But John Doerr was adamant in defending the fairness of the KPCB employment climate and the firm’s actions. Under intense questioning, Doerr claimed that Kleiner Perkins was not male-dominated. He pointed out that biotechnology startup expert Cynthia Healy was made the first female investing partner at Kleiner Perkins in the 1990s. “I don’t consider Kleiner to be a firm run by men,” he continued. “There have been a lot of female partners, junior and senior.” Doerr added, “We have many female partners, and general partners.” He emphasized, “That was as true in 2012 as it is now.”

Exelrod hammered Doerr about his involvement with Pao’s harassment complaints against her colleague Ajit Nazre. Pao has asserted that after she was first hired at KPCB, she was forced into a brief sexual affair with Nazre, who was married and had small children. Exelrod stated that although Pao broke off the relationship, Nazre allegedly began harassing Pao and she had to approach Doerr in 2007 to stop it.

“Did you talk to Mr. Nazre about this?” asked Exelrod. Doerr testified, “Yes, he told me he engaged with her in a consensual affair, that he loved her, that it was over, that she wanted him to leave his kids, and he couldn’t do that.”

When Exelrod suggested that Nazre’s side of the story was untrustworthy, Doerr responded that when they spoke, Nazre was “very emotional,” and that “he was trembling, he was very agitated.” Doerr said he told Nazre’s his behavior reflected a serious lack of judgment and he moved to punish him. “He did not earn his full bonus” that year. Doerr added, “The biggest punishment was that I told him I had lost confidence in his ability to be a leader at the firm.”

Exelrod tried to undermine Doerr’s testimony by pointing out that Nazre was promoted to senior partner the very next year. On Monday, former Hewlett Packard Executive Chairman Ray Lane testified he “made a mistake” when he did not inform others that another female junior partner, Trae Vasallo, had complained about harassment from Nazre. Doerr acknowledged that Nazre’s mentor, Ray Lane, fought for the promotion. Doerr admitted, “I don’t remember how I voted on that, but the partnership promoted him.”

Pao’s lawsuit has generated huge headlines about money and sex. Despite her lawsuit being complicated by her own personality and actions, Pao has become of a cult heroine to many women pursuing their future in Silicon Valley.