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Five uncomfortable truths about the Ellen Pao verdict, by Nitasha Tiku in The Verge

Stashed in: Venture Capital!, @jack, Kleiner Perkins, Sexism, Uber, Snapchat, Ellen Pao, Meerkat

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It really would have been different if Pao were a man.

During her testimony, Pao described meeting Twitter co-founder Jack Dorsey and then bringing Twitter to the attention of senior partner Matt Murphy. This was when the social network had only raised "one or two rounds of funding," so 2007 or 2008. According to Pao, Murphy said "the team was not business-minded and that we should not spend any more time with them." Kleiner wouldn’t end up investing in Twitter until 2010, when the party had ended by VC standards.

One of the most salient points Pao made on the stand was that women were not able to find sponsors for their investments at Kleiner, and that junior partners couldn’t push an investment through without a sponsor. The distinction between mentorship and sponsorship helped clarify how someone like Pao, who was actively mentored and protected by billionaire John Doerr, still could have been treated unfairly at the firm where Doerr reigned.

Figuring out who "sourced" an investment is admittedly tricky. But what if Pao had been sponsored to invest in Twitter? Credit for calling it early may have made her sought out by other investors or considered a "thought leader" in mobile development, both qualities dependent on the perception of others. In the closing arguments, Pao’s lawyers compared her to Chi-Hua Chien, a male partner who, like Pao, was called aggressive and arrogant. Kleiner considered Twitter a win for Chien when he led the firm’s investment in it in 2010.

Here’s a video of Chien talking about meeting Dorsey during the company’s first round of funding. "It totally made no sense. I didn’t invest in that round, unfortunately," he said with a laugh. Chien’s arc as an investor began when he was an associate at another Silicon Valley firm, Accel Partners. An associate is equivalent to junior partner at Kleiner — Pao’s position — but Chien is still credited for sourcing Accel’s windfall investment in Facebook.

By making the trial so emblematic, some observers started to distract from the facts of the case, which showed just how backwards these money men can be. 

Kleiner has invested in Uber, Nest, Dropcam, Waze, and Snapchat, but I was shocked with all this clubbiness that no one mentioned golf. Instead we heard about private planes, dinners at Al Gore’s house, and multi-million-dollar salaries. It’s not just that they look for "white, male nerds who've dropped out of Harvard or Stanford," to use Doerr’s words; it’s also the type of suits that are looking (mostly in their own backyard). What a strange dynamic to have mostly middle-aged white males investing in mostly 20-something white males, like a patronage system.

The real money is still controlled by men.

Pao’s lawyers, Lawless and Alan Exelrod, had a few bits of damning data that they weren’t able to pin on Kleiner, often because of some very convenient "could not recall’s". The plaintiff wanted to show that there was a concrete ceiling at the firm, even for uber-qualified women. They were hoping to do this by pointing out that neither Mary Meeker nor Beth Seidenberg — both brand names in their field — were partners in the management LLC that sits on top of Kleiner. On the witness stand, however, both Meeker and Seidenberg both convincingly testified that they had no interest in being part of that core group of decision makers.

Since the trial, a number of women who work in venture capital have spoken out about the issues Pao raised. The New York Times profiled "female-run venture capital funds," though some of the firms mentioned function more like angel investors, who have less capital to work with.

Angels put up their own money, whereas venture capitalists are funded by limited partners, typically institutional investors like universities or pension funds. Angels invest in the early stages, whereas VCs can plunk hundreds of millions of dollars into companies that are more established. When Doerr’s partners argued that Ellen Pao should be pushed into an operating role because she didn’t have what it took to be an investor, he offered to invest if she started her own fund. Kleiner invested in former partner Aileen Lee’s firm, Cowboy Ventures, as well, to give you some sense of the relative size.

Relegating women to smaller-scale investing roles appears to be less of a threat to the status quo. A common response to dismissing complaints about bias is that there’s no way the powers that be would operate against their own financial interests. But they do this all the time! While Snapchat touts its female users and Uber expands into India, they still don’t understand how having different perspectives could help them get another private plane. I can’t wait to see what these women do while the club busies itself with Meerkat and month-old startups with $40 million valuations.

Also worth reading is Liz Gannes' post-trial opus, "The Double Discrimination Standard":

All of Liz's article is worth reading, but the middle part has really stuck with me:

It’s hard to take a meaningful stand against something that’s subtle. Discrimination in the technology industry is not often overt — in fact, there’s even a word for it: Unconscious bias. And the particulars of any one situation aren’t simple, especially when personal loyalties are at stake.

For the last five weeks as we wrote daily trial coverage about the gender discrimination lawsuit brought against venture capital firm Kleiner Perkins Caufield & Byers by former employee Ellen Pao, Nellie Bowles and I received daily emails and messages. It was the most feedback we’ve ever gotten on any Re/code story.

People told us about conversations they’d had with men in venture capital about why they don’t hire more women. “They say ‘We’ve tried!’ They say ‘They’re just not in tech.’ It’s horseshit,” one woman who works in VC said. She didn’t want her name used. “The vast majority of partners, they’re MBAs, or guys out of finance. There are tons of women with those backgrounds. They hire men who look like that, why can’t they hire women who look like that? They say, ‘Oh, they all have jobs.’ Who are you kidding, the men [candidates] all have jobs too!”

Many people, especially women, told us the issues strongly resonated with them. They told us they felt they were treated differently and had fewer networking opportunities in the industry because of their gender. But they were largely unwilling to go on the record.

There are good reasons for that. Most prominently, Ellen Pao’s case was far from perfect — a jury of her peers ultimately disagreed with every count of it. For another thing, Pao has a complicated personal life, and many people don’t believe what she says because of her husband’s hedge fund’s bankruptcy problems and history of litigation. Plus, the protracted five-week-long trial wasn’t over until it was over, so people told us they were waiting to pass judgment in public. Others reminded us that Kleiner Perkins continues to be a big, respected, established venture firm, and picking sides could be bad for business.

Former Yahoo president Sue Decker was a rare woman willing to wade into the public discussion after she sat through a day of the trial with her daughters. She wrote in a guest column for Re/code:

“I, and most women I know, have been a party to at least some sexist or discriminatory behavior in the workplace. Many of the examples raised in this trial are behaviors I have personally witnessed along the way. At the same time, the men who may be promulgating it are often very unaware of the slights, and did not intend the outcome. And for the women, it happens in incremental steps that often seem so small in isolation that any individual act seems silly to complain about. So we move on. But in aggregate, and with the perspective of hindsight, they are real.”

Listen to that — she’s saying she recognizes Pao’s story in her own. She’s not saying that Ellen Pao is a martyr. She’s not saying Ellen Pao should have won. She’s saying there’s a problem here, and the trial created an opportunity to talk about it.

Liz published that on April 1, 2015. We still have a long way to go.

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