Here’s a sign of the changing winds in the venture capital business. Kleiner Perkins Caufield & Byers, one of Silicon Valley’s top venture capital firms, recently told a group of its limited partners that fund performance has not met expectations.
Citing people familiar with the discussions, Reuters reports that partners at the firm recently told investors that they are “frustrated and upset that the performance hasn’t been as good as they think it should be.” The partners in the firm also said that they are going to work hard to boost results.
This is a bit like A-Rod going into slump. But can Kleiner Perkins crawl out, or is the venerable firm nearing the end of its career?
Certainly, other venture firms — namely Andreessen Horowitz — have grabbed the spotlight in recent months. (It is a backer of Seattle startups such as Apptio, Julep and Zulily, as well as powerhouses like Box, Pinterest, GitHub and Airbnb).
Kleiner Perkins has missed out on some of the most promising new Internet companies, and took a big hit when the clean tech sector (where partners John Doerr and Al Gore placed a lot of dollars) took a hit. In Seattle, Kleiner is a backer of companies such as INRIX, Lockerz and DocuSign. (DocuSign and INRIX are ranked 4th and 6th in GeekWire 200 list of private companies, respectively).
As we’ve noted in the past, the traditional venture capital model is under pressure. (See last year’s story: The venture capital model is broken, and this damning report explains why).
Kleiner Perkins, which is investing out of its 15th fund, a $525 million fund raised last year, has always been recognized as a top-tier player. But are things changing? Has the luster worn off?
[Full report here from Reuters]