Kleiner Perkins Caufield & Byers has held a first close on what looks to be a $400 million fund, a source close to the firm says. At the same time, KP has undergone some minor changes in its general partnership. GP Vinod Khosla, one of the firm’s top moneymakers, has gone part time, while GP Tom Jermoluk’s all-to-brief tenure with the firm has come to an end.
The staffing changes are expected to have little impact on the remarkably successful firm, which this year will likely add a Google IPO to its long list of accomplishments.
PE Week was the first to report last November that Kleiner was talking to LPs about raising a new fund. It raised its last fund in 2000. Bloomerg News reported on Feb. 13 that KP had in fact raised $400 million for the fund. A source close to the firm says that KP for sure had its first close, and it may be the final close since Fund XI was smaller than the previous fund. KP has not yet finalized a sidecar fund, which it typically sets up for individual friends of the firm.
KP partners did not respond to requests for comment. (Khosla was out of the country and couldn’t be reached for comment last week.)
Bloomberg reported that Khosla would invest for KP’s new fund on a part-time basis. It said Khosla is making the shift because he wants to pursue philanthropic and entrepreneurial interests in his native India
The source PE Week spoke with said he wouldn’t read too much into Khosla going part time. For one, One hour a week of Vinod Khosla is worth a full week of work for a typical VC, he says. For another, Khosla went part-time before and ended up funding Juniper Networks and Cerent, two huge hits for KP, he adds. Khosla may in fact have plans for non-VC related activities in the short term, but if he comes upon an exciting startup he’ll be right back in the game, because that’s where his passion lies, the source says.
Khosla was scheduled to trek to India on Feb. 20 to meet entrepreneurs and help relaunch the Hyderabad chapter of The Indus Entrepreneurs. Khosla’s assistant said he was already traveling as of Feb. 18.
Khosla, 49, ranked second on Forbes magazine’s Midas List this year, down from the No. 1 spot a year earlier, but still two notches above KP’s best known GP, John Doerr. A co-founder of Sun Microsystems, Khosla hit home runs with telecom equipment companies Juniper, Cerent, Corvis, Extreme Networks and Siara Systems.
Another source close to Khosla says that he has wanted to do something significant to help his homeland for some time. Khosla recently donated $5 million to his alma mater, the Indian Institute of Technology in New Dheli. And back in 2000, Khosla was part of a group that proposed raising $1 billion to create a global institute of science and technology in India that would partner with U.S. universities. It’s unclear what happened with the proposed initiative. The last mention PE Week could find was story posted on the online site South Asian Women’s Forum in October 2000. That report said GIST had raised or received commitments for $500 million from Indian American entrepreneurs and hoped to start accepting students in 2003.
Khosla’s future plans in India – and how they will impact KP – will almost certainly be a key topic of conversation between the firm’s GPs and limited partners.
Limited partners are much less likely to fuss over the departure of Tom Jermoluk, aka TJ. He left the firm last year to work with longtime friend and KP investor Jim Clark on a Florida real estate venture, according to Bloomberg. The source PE Week spoke with says that Jermoluk hasn’t been active with the firm for about a year. He is no longer listed on Kleiner Perkins’ website.
KP made a big deal when Jermoluk, former chairman and CEO of Excite@Home, joined the firm. This is AWESOME, Doerr declared in a rare KP press release on May 10, 2000. The KP team is thrilled that Tom is joining us. TJ will be invaluable to KP ventures.
Despite the hype, Jermoluk’s stay with the firm was unremarkable. He was an investor and board member in a few deals that left dents in the firm’s sterling reputation. His biggest flameout was Excite@Home, which was essentially swallowed by AT&T; after it filed for bankruptcy protection.
Jermoluk and KP also backed Kibu, the self-described digital hangout for teen girls that took in $22 million in VC before it shut down, as well as MyCFO, which raised about $90 million in VC (and was once given a pre-money valuation of $250 million) before being sold to BMO Financial Group for $30 million.
Another TJ deal that KP can only hope to exit from is SmartPipes, an Internet provider that has taken in $92 million in VC.
Besides SmartPipes, Jermoluk also sat on the boards of IPUnity and AOptix for KP, as well as Shutterfly, which he invested in before joining the firm.