After a grueling five-week trial and three days of deliberations, a jury in San Francisco found that Kleiner Perkins Caufield Byers, one of the most prominent venture capital firms in Silicon Valley, did not discriminate against Ellen Pao, one of its former investing partners, on account of her gender. Jurors found against Pao on all counts, providing a stunning conclusion to one of the most important trials in the history of tech investing.
The trial captivated Silicon Valley, which has long been accused of being a boys' club, and threw the normally secretive world of venture capital under the legal system's harsh microscope. The question under consideration was whether Pao, who is now the CEO of Reddit, was discriminated against because of her gender by being denied opportunities for advancement, and being pushed out of the firm in 2012.
Pao's side made the case that she was a victim of discrimination, based on a failure to be promoted despite glowing performance reviews, and a general pattern of harassment by men at the firm (including gifts given to her by male partners at the firm, such as a Leonard Cohen poetry collection "The Book of Longing). Pao alleged that Kleiner Perkins retaliated against her by pushing her out of the firm after she filed suit. Pao also alleged that she was pressured to have an affair with Ajit Nazre, another Kleiner Perkins investor, and was punished after she ended the affair. More generally, Pao's side attempted to paint Kleiner Perkins as a place where women simply were not invited to the party.
“Kleiner Perkins has been acting entitled,” said Pao's lawyer in a closing statement. “It’s not taking responsibility for its culture, where men are treated differently than women, where men are promoted over equally qualified women, where men are allowed to behave in certain ways and are rewarded.”
In response, Kleiner Perkins' lawyers sought to paint Pao not as the victim of discrimination, but as someone who was never cut out to be a venture capital investor in the first place. Expert witnesses testified that Kleiner Perkins is one of the better firms in Silicon Valley about hiring and advancing women. Lawyers fought to show that Pao was inconsistent in her claims, that she had a history of alienating co-workers and didn't have "chemistry" with the firm's other partners, and that her technical expertise wasn't on par with that of her peers. And John Doerr, a senior partner at the firm, testified for more than 70 hours about how he fought to keep Pao happy at the firm and make sure her career advanced.
"This is the case of an employee who was never suited for the role of investing partner, an employee who never had a skill set," the firm's lead attorney claimed. "Kleiner Perkins gave Ellen Pao more than a level playing field, it gave her every opportunity on that playing field or off it.”
At times, the trial got ugly. As The Verge's Nitasha Tiku notes, Pao's testimony midway through the trial was greeted with particularly sharp attacks by Kleiner Perkins' expensive cadre of lawyers, who tried to paint her as an incompetent striver.
Witnesses established that Kleiner Perkins only promoted "thought leaders." So Hermle belittled Pao’s self-proclaimed "domain expertise" in areas like mobile development, pointing out that "extraordinary developments" in technology had taken place since Pao did brief consulting work with Danger Research, the startup that built the first feature phone, six years ago.
Many onlookers viewed the Pao case as a microcosm of the plight of women in venture capital more generally. (Although it's not, really, since most venture capital firms don't have any female investing partners at all.) But it was a referendum of sorts on the insular world of venture capital, whose senior ranks are extremely homogenous. And it promises to throw more fuel on an ongoing national conversation about the diversity of the tech industry more generally.
As a result of her across-the-board loss, Pao won't get any of the $16 million in damages she sought, and will have to pay Kleiner Perkins' expert witness costs, which likely tally in the hundreds of thousands of dollars. Kleiner Perkins isn't getting off scot-free, though. It has sustained an incredible amount of embarrassment over the course of the trial, and has been exposed as a firm whose stable public image was often at odds with its tumultuous inner workings. Among the secrets revealed on the stand were the enormous salaries of Kleiner Perkins partners, stories about private jets and luxury hotels, and salacious private e-mails between employees of the firm.
Pao's case is rare in that it went to trial, rather than being settled out-of-court, but it will likely be the first in a wave of such claims. Already, a former Facebook product manager is suing the social network for discrimination and retaliation, and a former Twitter engineer is suing for gender discrimination. Some women in the tech industry have quietly expressed fears that firms will be slower to hire women after seeing the damage that the Pao trial caused to Kleiner Perkins.
The biggest casualty of the Pao trial, though, may be Silicon Valley itself. For decades, the tech industry has sought to project the impression that it is a meritocracy—open to all with talent and drive, unconcerned with status, race, or gender, devoted solely to innovation. Whatever was left of that image died over the course of the last five weeks, as the inner workings of tech's elite ranks were revealed. Kleiner Perkins may have convinced a jury of its case, but there were no winners in this trial.