Mother Jones

Former venture capitalist Ellen Pao says the big-name VC firm she worked for, Kleiner Perkins Caufield & Byers, failed to promote her because she’s a woman. She says she was pressured into an affair with a coworker and was fired when she complained, and she’s suing the firm for $16 million on charges of gender discrimination and retaliation. Kleiner claims the affair was consensual, and says Pao—now the interim chief executive of Reddit—didn’t thrive at the firm because she “lacked the ability to lead others, build consensus and be a team player.”

The trial kicked off last week in San Francisco and is expected to last five weeks. It’s offered a rare glimpse into the nutty and secretive world of the Silicon Valley elite, where cases of this rank usually settle rather than go public. A few of the details we’ve learned so far:

Silicon Valley jargon is weird and complicated: Judges aren’t always the most savvy bunch when it comes to tech lingo. But it’s hard to fault Judge Harold Kahn for cutting off a former Kleiner partner’s testimony to ask what exactly she meant by “thought leadership.” The confusion didn’t end there: The next day, a juror raised his hand and asked another former partner the same question. His explanation—”It’s being recognized as an expert in a specific area”—seems to have satisfied the court.
Meanwhile, the odd grammar of startup names proved challenging for the court recorder. “With a C?” she asked a witness about the spelling of Klout, the social media analytics tool. “Tumblr,” “Zuora,” and “Y Combinator” also required clarification.

Venture capitalist gift-giving rituals are strange: For Valentine’s Day one year, senior partner Randy Komisar presented Pao with Leonard Cohen’s Book of Longing, which combines steamy poetry with drawings of naked women. Komisar’s defense is that his wife bought it. But it seems as though the weird gift-giving was mutual: Pao gave Komisar a $300 board game that teaches that the key to wealth is optimism.

Venture capitalist salaries are insane: As a junior partner in 2011, Pao made about $500,000. Had Pao been promoted to senior partner, as were three of her male coworkers, she could have expected to earn as much as $2.6 million annually.

It’s important to sit in “the power corridor”: Kleiner’s trial brief dismisses some of Pao’s complaints: “Many of the alleged discriminatory acts involve such minutiae as…Pao’s office not being in ‘the power corridor’ (whatever that means).” Sounds silly, right? But based on managing partner Ted Schlein’s testimony, it seems seating arrangements at Kleiner do say a lot about status: Asked why he didn’t sit in the back of a conference room to make space at the front table for Pao and other junior partners, he responded, “That’s not how the meetings work.”

Women don’t like sharing: At least, that was Kleiner senior partner Chi-Hua Chien’s rationale for not inviting any of them on the company’s 2012 ski trip to Vail. “The issue is that we are staying in condos, and I was thinking that gents wouldn’t mind sharing, but gals might,” he wrote in an email to someone who asked if a female entrepreneur from a company Kleiner had invested in could join the trip. “Why don’t we punt on her and find 2 guys who are awesome. We can add 4-8 women next year.” There was no ski trip the next year.

“Cocky” and “confident” mean very different things: When it comes to venture capitalists, Schlein explained, “cocky” means that “by the time you’re done talking with somebody, they don’t like you.” Confidence involves a similar level of swagger, “but by the end of the conversation the person feels they have connected with you and they think you truly know whence you come.”

Discussing the Playboy Mansion while on a private jet is business as usual: As evidence of Kleiner’s boys’ club culture, Pao described a 2011 private jet ride on which tech exec Dan Rosensweig regaled Kleiner staff with tales of meeting Christie Hefner, Hugh Hefner’s daughter, at the Playboy Mansion. Senior partners allegedly did nothing to change the subject.
On the witness stand, Schlein confirmed that that conversation happened. But he denied Pao’s other allegations about inappropriate things said on that flight: There was no discussion about porn, Victoria’s Secret, or “the breasts of Eastern European women.” Rosensweig did bring up the attractiveness of European waitresses at a club he frequented—but Schlein clarified that it wasn’t a strip club.

How VC firms pick their investments: Pao’s legal team dug up this rather unfortunate 2008 quote from John Doerr, the man who hired her: “If you look at Amazon founder Jeff Bezos, or Netscape founder Marc Andreessen, Yahoo cofounder David Filo, the founders of Google, 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.”

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Erotic Poetry and $300 Board Games: The Trial Exposing Silicon Valley’s Secrets