Who are the active investors? Evidence from venture capital by Laura Bottazzi, Thomas Hellmann, Marco Da Rin

TL;DR - Eugene Kleiner and the rest of the “traitorous eight” set a precedent of active investing and entrepreneurial backgrounds in the VC space.

Helpfulness - 3

Tags - notable investors, early vc, kleiner perkins

Questions addressed:

  • Who was Eugene Kleiner?
  • What impact did Kleiner and his early colleagues have on the VC industry?
  • How important is entrepreneurial experience for VC partners?

Summary:

  • Eugene Kleiner was an engineer and entrepreneur prior to founding Kleiner Perkins.
  • Prior to this, many investors had had finance backgrounds rather than business / entrepreneurship experience.
  • Other members of the so-called “traitorous eight” left Shockley along with Kleiner to found Fairchild Semiconductor.
  • Are these early examples indicative of the human capital that successful VCs need to provide?
    • Partners should add value beyond the financial aspect.
  • VC partners with industry experience are more active as investors than partners with only a finance background.
  • This is important because active investment is a key component of the VC value-add.
  • It is also a significant finding for international VC because industry experience is sometimes harder to come across than finance experience in non-US areas.

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