Kleiner bets the farm (cont.)

There's one other complicating factor at Kleiner: its reliance on Doerr himself. Doerr and his partners tell outsiders - and themselves, apparently - that the firm is a true partnership and that Doerr is but an influential cog in the machine. It's a useful notion that makes Kleiner's institutional clients feel as if they're entrusting their money to a team, not just one superstar. But John Doerr is the de facto managing partner. If he calls a meeting for a Sunday afternoon, the partners suit up and assemble. It was he who led the charge into alternative energy. He even leads when something isn't his idea. Matt Murphy, who runs the iFund initiative, says Doerr "dragged his feet" about making a push in mobile-phone investments. But before long "John and Steve talked" - that would be Steve Jobs, naturally - and the result was Kleiner's new zeal for iPhone-related companies. Says a Silicon Valley entrepreneur who has worked with the firm for well over a decade: "John has dominated Kleiner Perkins since the day I met him, and he has always denied it."

Doerr's preeminence might rankle his colleagues - if it weren't for all the money he makes them. Brook Byers, the name partner who hired Doerr in 1980, calls him "one of the legendary venture capital investors of all time." But over the past few years three top Kleiner producers left the firm: Vinod Khosla, Kevin Compton, and Doug Mackenzie. Each made the usual noises about family and new pursuits - and each is working elsewhere as a full-time VC today. (Khosla caught the "green" bug first, and today his new firm, funded mostly by Khosla himself, is at least as important an alternative-energy investor as his old firm.)

Doerr can't do everything, of course, and with 32 full-time investment professionals, Kleiner Perkins is bigger than it's ever been. Byers runs a distinct biotech practice along with longtime partner Joe Lacob (who now spends half his time on energy) and two medical industry veterans, Beth Seidenberg and Dana Mead, hired in 2005 to eventually take over that business. But biotech never has produced the profits that Doerr's side of the shop has. In tech (info and green), Ray Lane is highly valued for his operational chops but has yet to score big as a VC. Top partners Ted Schlein and Randy Komisar have broad experience but no massive payouts. Finally, there is Kleiner's junior varsity, a team of accomplished brainiacs who include Trae Vassallo, Wen Hsieh, Chi-Hua Chien, Ellen Pao, Aileen Lee, and Ajit Nazre. These relative youngsters (most in their 30s) spend years serving apprenticeships to the older partners, and most are just beginning to lead their first investments, making it impossible to judge their company-building acumen.

Lately Kleiner Perkins has been stocking up on aging stalwarts of the technology industry. Bill Joy, 53, a former chief scientist at Sun, joined Kleiner three years ago. Bing Gordon, 58, a co-founder of Electronics Arts, signed on in May. John Gage, 65, another top scientist at Sun, joined in June - to work on alternative energy. None have any experience in venture capital and aren't expected to lead the firm.

Who will lead Kleiner Perkins when Doerr hangs it up? Younger partners at other firms, like Roelof Botha at Sequoia and David Sze at Greylock, have begun making prominent names for themselves. It's an issue Doerr thinks is overblown. He brings up an article in the defunct magazine Upside in 1989, when Tom Perkins retired, that asked if Doerr and Byers would drop the baton. They obviously didn't. Of course, by 1989, Doerr had Compaq and Sun Microsystems under his belt. Byers had backed companies that revolutionized the detection of prostate cancer and the effectiveness of ultrasound scanning. Today's crowd, bright and credentialed though it may be, doesn't have any hits of that stature to its credit.

For now, investors have little choice but to give Kleiner Perkins the benefit of the doubt. More than one friend of the firm reminded me that it was derided for investing in Internet companies in the mid-1990s, when the idea seemed hokey and bound to fail. Plenty of other firms passed on the opportunity to invest in Google, which was just another search engine company in 1999. "In our business we don't know if we're right about anything for years," says Byers. "It's a humbling business." If Kleiner is right, if alternative energy is a hit and if the IPO market returns, nothing else will matter. And John Doerr will be able to boast of whole university campuses being built with the dollars earned by Kleiner Perkins.

Reporter associates Doris Burke and Yi-Wyn Yen contributed to this article. 

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