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VCs in Bathrobes, Women Asked to Play Secretary, Angry Texts: Day One of Pao v. Kleiner Perkins

“I go to answer the door and Ajit was standing there in a bathrobe and slippers .... "

Kleiner Perkins

The scene outside the courtroom this morning in San Francisco did not betray the raw, sex-money-and-power-filled trial that would unfold upstairs.

The plaintiff Ellen Pao, who is suing the powerhouse venture capital firm Kleiner Perkins Caufield & Byers for gender discrimination, arrived around 8:15, so quietly that all three news photographers poised to capture the moment missed it. Outside the courtroom, she stood alone, neither texting nor chatting, until the doors opened. Inside, she sat erect in a buttoned purple blazer and saved the three seats behind her for family.

By 9:15, the large courtroom was mostly full, but it wasn’t mayhem (in Silicon Valley terms, this was no Apple Watch announcement). The judge’s 96-year-old father came to watch. Most in the room were there for work (lawyers, press).

But if the opening arguments today were any indication, this trial will be a ferocious one. There will be intimate details from both sides and little room to compromise. And there was an unexpected star witness who testified to her own experience with sexual harassment at Kleiner Perkins: Former partner Tracy “Trae” Vassallo.

The plaintiff’s attorney started with stories that indicate a culture of gender problems at Kleiner Perkins, alleging that: Ajit Nazre, a male partner, showed up unwanted at a female employee’s hotel room wearing nothing but a bathrobe; Randy Komisar, another partner, gave a book of sexual poetry and nude sketches to Pao; and, partner Chi-Hua Chien told her that “women kill the buzz.”

The defense argued Pao was hired as, basically, secretarial support staff to famed venture capitalist John Doerr and that later, when promoted to an investing role, she felt “entitled” to seniority and power rather than working toward it — and that at no point was she up to the task of being an investor.

The Plaintiff

“Ellen Pao came to Kleiner Perkins to become a venture capitalist,” Pao’s attorney Alan Exelrod began, listing Pao’s credentials (Princeton, Harvard) and implicitly refuting the defense’s claim that she was meant for an operational role rather than an investing one.

Exelrod, an older man in a dark suit and a blue tie, said that Pao was fired for protesting sex discrimination and retaliation.

Pao contends that she was pushed into a minor role and left out of important events after convincing Kleiner Perkins to invest in a patent litigation startup called RPX that went public, perhaps the best example of a successful investment by a junior partner during that era.

When Kleiner Perkins had a dinner at former Vice President Al Gore’s condo in San Francisco, Pao, who lived in the same building, wasn’t invited — no women were.

Toward the end of his opening remarks, Exelrod quoted Doerr, who had hired Pao, discussing what he thinks “correlates more than any other success factor” in entrepreneurs:

“If you look at Bezos, or [Netscape founder Marc] Andreessen, [Yahoo co-founder] David Filo, the founders of Google, they all seem to be white, male, nerds who’ve dropped out of Harvard or Stanford and they absolutely have no social life. So when I see that pattern coming in — which was true of Google — it was very easy to decide to invest,” Doerr had said in 2008.

Exelrod propped up a poster entitled: “Who Was Promoted in 2011.”

The sign had a list of six headshots: Risa Stack, Vasallo, Ellen Pao, Wen Hsieh, Amol Deshpande and Chi-Hua Chien. Pao was the only one with a portfolio company that had been bought or went public. The three women had each been hired before the men had, but none had been promoted to senior investing partner in 2011. The three men had.

The Defense

Kleiner Perkins’s attorney Lynne Hermle of Orrick stood to address the jury.

Hermle, an imposing woman in a leopard print top who represents Kleiner, argued that the firm is a “small partnership” bound together by teamwork, and that Pao was not a team player. While Exelrod argued that Pao’s male equivalents received similar critiques in their performance reviews, being described as “territorial” and “tough,” Hermle argued that Pao was uniquely difficult in the workplace.

Pao, Hermle said, was hired to “schedule meetings” and “manage [Doerr’s] calendar.” In a slide, the words “assist,” “as directed,” and “Doerr’s” were in bold. As a venture capitalist, she needed to provide “thought leadership,” which she was unable to do, Hermle said.

Hermle continued: “She did not have the presence, she did not have the sales skill, she was not a self-starter … She wasn’t in the ballpark, she wasn’t even close. She wanted the opportunities to come to her.”

And it was not just the three women Exelrod singled out who were not promoted to senior partner in 2011. There were also many other male junior partners who were not promoted at the time, Hermle said.

On the topic of Nazre, Hermle argued that Pao knew he was married and had wanted him to run away with her. She cued up texts from their breakup.

As for the book of love poems another Kleiner partner had given Pao, Hermle said she kept the book and carried it around in her car rather than complaining.

“He meant nothing inappropriate,” Hermle said, holding up a receipt that showed the partner’s wife had purchased the book. She did not address the nude sketches.

Hermle said that Pao only decided to file the sex discrimination suit when she heard Vassallo had been harassed by Nazre: “She came forward because she learned a colleague was going to make a complaint about Mr. Nazre, with whom she’d broken up five years earlier.”

Another Kleiner Perkins Partner, Alleging Sexual Harassment, Takes the Stand

Trae Vassallo — who brought the startup Nest to Kleiner Perkins (a company that was sold to Google for $3.2 billion) — took the witness stand. She recalled having been told by Kleiner Perkins partner Ray Lane that she was in the “top 1 percent of all VCs I’d worked with.” She was, however, not promoted at the time. (She later was.)

Vassallo did not come out against Kleiner Perkins — actually the opposite, she had lots of praise for the firm as a whole — but she described issues she had with certain partners, including Chi-Hua Chen.

“I felt like Chi-Hua didn’t have a lot of respect for me,” she said. “When you’re researching a new company, you need to get consensus from partners, and it was hard for me to get him to take the time to look at a company with me.”

She described how Nazre had harassed her. At a work meeting between the two of them at a restaurant, “he started touching me with his leg under the table, which to me made it clear he was not there to talk green tech technology,” she said.

Nazre left her alone, she said, when she got pregnant, but then he was put in charge of her annual performance review, which Vassallo thought would “give him the opportunity to not be completely fair.” Kleiner Perkins declined her request to remove him from that position. (In cross-examination, she said the review was ultimately not unfair.)

There were other problems: Although she was leading the green tech strategy, she said she was put in the back row during an important strategy session at the firm’s 2011 annual retreat.

“It sounds petty, but people were arranged in the room around how much input they’d have in the discussion,” she said. “I was insulted. I thought I’d be part of leading the discussion.”

But the most serious incident was when Nazre at one point tricked her into attending a dinner in New York, under the auspices of meeting an influential Internet executive. They arrived at the restaurant and the maître d escorted them to a table for two. The guest never arrived. After dinner, she went back to her hotel room.

“About 30 minutes later, I was working on my email and there was a knock on my door. I go to answer the door and Ajit [Nazre] was standing there in a bathrobe and slippers,” she said. “He asked if he could come in. I said no. He asked again, I said no. I eventually pushed him out and closed the door.”

Vassallo was visibly uncomfortable describing the altercation. Her husband sat in the front row, leaning forward. She described how Nazre switched seats to sit next to her on the flight home the next morning, much to her chagrin.

In cross-examination, Hermle returned to some of the same incidents with a shorter series of questions, focusing on how supportive Randy Komisar and John Doerr had been. She had Vassallo describe how Kleiner Perkins quickly hired an outside investigator, found Nazre to be at fault and fired him. She tried to paint these incidents as isolated rather than “a conspiracy.”

“Randy is a good principled person,” Vassallo said. And: “Doerr was quite committed to bringing more women into the industry.”

Hermle also asked whether Vassallo knew Pao had been speaking negatively about her to other people and had even, at one point, suggested Vassallo be fired.

“Were you aware Ellen Pao was calling you untrustworthy?” Hermle said.

“She told me that to my face,” Vassallo said.

The trial adjourned a little early, around 4 pm.

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