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Mary Meeker, the legendary internet analyst, is leaving Kleiner Perkins

Meeker is leading an exodus in a huge split at one of Silicon Valley’s most famous firms.

Mary Meeker, Code 2017
Mary Meeker
Asa Mathat

Mary Meeker of Kleiner Perkins Caufield & Byers, one of the premier Silicon Valley investors at one of its premier venture capital firms, is leaving her position in an abrupt, high-profile splitting of the firm she helped lead.

Meeker is leading an exodus of late-stage investors from Kleiner Perkins in its most dramatic shake-up since legendary investor John Doerr stepped back from his role more than two years ago. Meeker’s exit — she, along with three of her partners, will form a new firm — will undoubtedly deal a hard blow to Kleiner Perkins, given her high profile in the business community and her stature as by far the most senior woman in venture capital.

Meeker, “the first Wall Street analyst to become a household name” during the dot-com boom, has been most famous in this era for her agenda-setting, unusually thorough “Internet Trends” slide decks, delivered — in memorable, rapid-fire fashion — in recent years at our annual Code Conference. This year’s deck included 294 slides and has been viewed more than a million times; last year’s, with 355 slides, is well past three million views.

The departures of Meeker and her colleagues — Mood Rowghani, Noah Knauf and Juliet de Baubigny — are rooted in different visions for the types of deals they would like to do. But like so many disputes in recent years at Kleiner Perkins, there was also persistent friction between the two sides in ways that had little to do with the firm’s core business — over mundane things such as whether to host a holiday party in San Francisco or closer to Sand Hill Road in Silicon Valley — according to people familiar with the situation.

Kleiner Perkins is one of tech’s oldest firms and its early investments in Amazon and Google have made it part of Silicon Valley lore. That legacy has helped sustain the firm even as it self-admittedly missed out on a wave of generation-defining startups. Meeker’s new team will lose the connection to that brand, effectively placing a bet on the singular brand of Meeker.

“The way the teams operate are just very different,” Meeker said in an interview with Recode.

The principals are naturally downplaying how important a split this is, but this is a massive moment for the firm.

“I don’t think it’s a huge deal,” Ted Schlein, who succeeded Doerr as the de facto head of the firm, said in an interview. The late-stage investing group, which started in 2011, “continued to diverge away from what the core part of Kleiner Perkins has done for 46 years, and will continue to do for another 46 years.”

People familiar with the situation described a distant relationship between the early-stage group, which backs U.S. startups that sometimes don’t have a finished product, and the later-stage group, which can compete with sovereign wealth funds to back companies worth billions of dollars all across the world. The two teams spent fairly little time with one another in recent years, sharing office space, some limited partners, and — critically — a storied brand. But deals? Not many.

Lots of top investing firms have two teams that operate semi-independently, and those firms don’t feel the need to go separate ways. But at Kleiner Perkins, there were cultural clashes between the two squads. The firm has long been home to personal squabbles between its big-personality investors — in-fighting that spilled into very public view during the gender discrimination lawsuit brought by Ellen Pao — and it has been unable to put those to rest even as it elevated a new, likable leader in Mamoon Hamid, who joined the firm last year.

Hamid is a bit of a purist for early-stage investing, though Schlein said the decision was not solely his.

What the decision was, according to the people familiar with the situation, was fairly abrupt. While the two sides have been growing apart for years, they had a “moment of clarity” in the last week or so, as one person said, and the two teams quickly moved to go public with their plans for a split before it leaked. The firm’s investors — its limited partners, in industry parlance — were only informed early this morning.

The breaking point came as the team had to decide whether to raise another later-stage fund under the Kleiner banner or under a new one.

The new, still-to-be-named firm led by Meeker will have immediate cachet given Meeker’s connections on Wall Street, where she served as a top research analyst at Morgan Stanley, and in Silicon Valley. Unlike most big-name tech investors, Meeker has name recognition that goes well beyond the sector because of her annual trends report.

“There is only one Mary Meeker,” Schlein said at the time of her hire.

Schlein now says he is “not naive” about what it will be like to lose Meeker. Kleiner Perkins will have to move on without its most famous name. And after the exit of another investor, Beth Seidenberg, in an unrelated departure, it will have no female general partners. Kleiner Perkins plans to take some economic stake in the new firm.

“People have gotten emotional, not in an angry way,” said one of the people, “but in a poignant way.”

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