Keiretsu Comedown

Sure, nearly all venture capital firms were guilty of fostering a mercenary environment in which the fast-buck Internet IPO became more important than creating innovative, long-term businesses with real technological merit. But until quite recently, everyone in the venture industry - from limited partners to entrepreneurs to investment bankers to other VCs-believed that Kleiner Perkins was the "school of sober second thought." Kleiner was the one firm you could count on to see past the short-term trends and ferret out the real winners. It was not supposed to get caught up in the general craziness of the day and make the same irrational investments as everyone else. But it did. Over the past few years, Kleiner pumped hundreds of millions of dollars into dozens of now-deceased startups. Limited partners are starting to complain about Kleiner in a way unthinkable a few years ago, and are particularly worried about several new partners, including Tom Jermoluk, the former chairman of one of Kleiner's biggest failures-Excite@Home.