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the sponsorship of famed Wall Street analyst
Mary Meeker, a Kleiner partner since 2011,
the firm that had failed repeatedly to invest
at increasing levels now participated in the
$363 million funding round, valuing Robin-
hood at $5.6 billion.
The inability to get in on a hot startup’s
ground floor, only to subsequently pay a far
richer price, was all too common for the once-
storied firm. Kleiner had sat out on another
generation of technology investments, the
crop of so-called Web 2.0 companies, includ-
ing Facebook in the 2000s. Now, in the 2010s,
it was failing again to make early-stage invest-
ments—the traditional meat of venture capital
investing—in the most sought-after startups
of the day. But this time its whiffs came with a
perverse twist: Kleiner was succeeding wildly
with a new strategy centered around Meeker,
who ran a separate fund within the firm fo-
cused on more mature private companies that
required capital to grow as opposed to merely
establish themselves.
“Growth” investing, with its more devel-
oped companies, should be somewhat safer
than “venture” investing and would also earn
commensurately lower returns. Yet Meeker’s
OME FIVE YEARS AGO Vladimir Tenev and
Baiju Bhatt, founders of a potentially
disruptive no-fee stock brokerage
startup called Robinhood, set out to
raise capital for their fledgling Silicon
Valley outfit. They sought a relatively
small amount, $13 million, that would
value their idea at $61 million. The
former Stanford classmates, both
within spitting distance of their 30th birthdays at the time, did
what entrepreneurs have been doing for decades: They asked the
venerable venture capital firm Kleiner Perkins Caufield & Byers to
back them.
Kleiner—its singular name is as sufficient on Sand Hill Road
as Oprah is in Hollywood—was interested. The firm sees lots of
opportunities, however, and it chose not to bite. Then, in mid-
2015, when Robinhood was looking for another $50 million at a
valuation of $250 million, Kleiner passed again. By 2017, when
Robinhood became a “unicorn” valued at $1.3 billion as it raised an
additional $110 million, it was the startup doing the snubbing: It
excluded Kleiner from the list of venture firms that participated in
its funding.
It wasn’t until early last year that Robinhood and Kleiner finally
connected, according to accounts from dealmakers on both sides.
By then Robinhood had made such a splash in the brokerage
world that Fidelity, TD Ameritrade, and Charles Schwab had cut
fees in response to the upstart’s zero-commission offering. Under
S
SILICON VALLE Y HISTORY
1972
Kleiner Perkins
Caufield & Byers
is founded by
Eugene Kleiner,
Tom P er k ins ,
Frank J. Caufield,
and Brook Byers.
1976
Kleiner invests
$100,000 and
incubates
biotech busi-
ness Genentech,
which sold for
$47 billion three
decades later.
1980
John Doerr,
who worked
in sales at
semiconductor
maker Intel,
joins Kleiner as
an in v e s t or.
1994
Kleiner invests
$5 million for a
25% stake in
Netscape, the
first commercial
web browser,
producing
returns of
$400 million
when the com-
pany goes public
the following
y ear.
June 1996
The firm takes
an $8 million
stake in Amazon,
which goes
public the fol-
lowing year.
June 1999
Alongside rival
Sequoia Capital,
Kleiner invests
$11.8 million
for a stake in
Google, one of
the greatest
venture invest-
ments of all time.
Feb. 2004
General partner
Vinod Khosla
leaves to launch
his own firm,
Khosla Ventures,
after 18 years
at Kleiner.
GENENTECH: JUSTIN SULLIVAN
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