In Memoriam: EUEGENE KLEINER –

Eugene Kleiner was in pain in his final days as cancer wore him down. When his daughter came to visit him she told him what a remarkable life he had led. His reply: “Yes, but tomorrow is a new day.”

History will remember Kleiner as one of the fathers of Silicon Valley and modern venture capital, but without his unfailing optimism he may not have been either. Kleiner died on Nov. 20 at the age of 80.

“I got a sense of confidence from Eugene,” says Tom Perkins, who, with Kleiner, co-founded Kleiner Perkins Caufield & Byers. “At our first meeting he said, You and I can make it happen,’ and he really meant it. He gave me a sense of confidence and optimism. That’s my greatest debt to Eugene.”

Perkins was among more than 150 friends, colleagues and family members who turned out to offer a final goodbye to Kleiner on Dec. 5 at Congregation Beth Am in Los Altos Hills, Calif. The days before had been wet and dreary, but the sun came out and lit up the yellow-red leaves on the trees surrounding the synagogue.

Colleagues spoke of how Kleiner conducted business honorably and fairly (rare traits in a field sometimes called “vulture capital”); how he would much rather listen than talk; and how his sharp intellect and dry sense of humor would often produce pearls of wisdom, some of which have been dubbed “Kleiner’s Laws.”

Friends and family described him as a husband deeply in love with his wife, Rose, who was just as gregarious as he was reserved; as a father who took pleasure in the little things, like sharing a good meal with his family or taking his niece out for an egg cream; and as a generous benefactor who never asked for thanks or praise.

His son, Robert Kleiner, remembered him as a man who didn’t have any interest in hobbies. His father received golf clubs for his 55th birthday, but “he never took a swing,” he says. He got a bike when he turned 60, but “the odometer never went past zero.” He got a telescope for his 65th birthday, but he never sat around gazing at the stars. For Eugene Kleiner, no hobby was more interesting than creating companies.

Kleiner’s success as an entrepreneur and venture capitalist is all the more dramatic considering where he started. Born in Vienna in 1923, he was forced to flee his homeland in 1938 due to the Nazi occupation. He had to grow up fast. While the rest of his family fled to safety, the 15-year-old stayed behind to raise money by selling family belongings. On his own, he made his way through France to Belgium, where he rejoined his family. They needed to bribe an official in Portugal to gain passage to the United States, and Eugene was chosen to handle the transaction. He shrewdly offered less money than he had, showing his first sign of business acumen. The bribe worked and the Kleiners were off to the New World, settling in Brooklyn, N.Y., in 1941.

Eugene’s father felt his son should learn a trade, so he became a toolmaker, an occupation he took up before he entered the Army. After the war, Kleiner went to college on the GI Bill. Although he didn’t have a high school diploma, he was smart enough to pass a high school equivalency exam and get accepted to Polytechnic University in New York. He studied mechanical engineering and earned a bachelor’s degree, then earned a master’s degree in industrial engineering from New York University. That gained him entree to Western Electric, where he caught the attention of Nobel Prize winner William Shockley. When Shockley asked him if he wanted to help start Shockley Semiconductor Laboratory in Silicon Valley, Kleiner and his wife packed their things. “I remember the going-away party” says Eugene Reed, Kleiner’s cousin. “They had bought a new convertible Buick and drove it all the way to the West Coast.”

It turned out that Shockley wasn’t much of a manager, and within a year Kleiner and seven others left in 1957 to start their own company. Kleiner wrote the now-famous letter that convinced Arthur Rock, then a New York banker, to help finance the group that Shockley dubbed the “Traitorous Eight.” “There may not have been a Fairchild if it weren’t for him,” Rock says.

On top of its own success, Fairchild Semiconductor gave birth to dozens of technology companies – Advanced Micro Devices, Intel (which Kleiner personally helped bankroll) and National Semiconductor, among them. That was enough to etch Kleiner’s name in the history books.

He went on to make history in the venture capital business. Certainly there were others before him, men like Rock, Bill Draper, Pitch Johnson and Paul Wythes, but Kleiner and Perkins were the first to incubate and work hand-in-hand with entrepreneurs, as they did with Tandem Computer and Genentech. “I devoted a lot of time with Jimmy Treybig at Tandem,” Kleiner told Forbes ASAP in May 2000 in a rare interview. “Both Tom and I were on the board, and we were almost co-founders of the company.”

Brook Byers, who joined Kleiner Perkins in 1977 along with Frank Caufield, says Kleiner “was the benevolent, wise father figure. He was just a calm, wise person.” Back then Kleiner was 54 and Byers was a relatively young man of 32. He recalls going to his mentor, worried about the risk of investing in Hybritech, the first monoclonal antibody company. The biotechnology industry didn’t exist yet, and in those days the entire firm did one deal a year, so it was no small matter deciding which company to bet on. True to the firm’s hands-on approach, the deal also required Byers to take a leave of absence to start and run the company. Would his career be over if the company failed?

“You should be taking these risks,” Byers recalls Kleiner telling him. “What do you want to be? Do you want to be someone who invests with others your whole career or invest in something you initiated where you are the entrepreneur?” (Hybritech went public in 1981 and was bought by Lilly for $400 million in 1986.)

The firm’s hands-on approach enabled it to attract other entrepreneurs, like John Doerr, who would be instrumental in its continued success. “Eugene and Tom are not investors, they’re builders,” says Doerr, who joined the firm as an associate in 1980. By the time Doerr came aboard, Kleiner was easing his way out of the firm. Still, he left a lasting impression. “He was a great man, a tremendous man,” Doerr says.

As much as he loved investing in and mentoring startups, Kleiner was apparently less enthusiastic about the business of venture capital as it turned into an industry in and of itself. He retired from Kleiner Perkins in the 1980s, very likely missing out on some of the firm’s most successful funds, a friend says. “He was not an overly material guy,” Robert Kleiner says. “He could have chosen a much wealthier route, but making money was not quite as important to him as enjoying how he was making it.”

One of the things Kleiner enjoyed about his work was spending time with young venture capitalists, something that other senior statesmen didn’t always have time for. “When I was first in the business in the late 80s and early 90s, it was very difficult at times to get the attention of senior people, whether it was at industry luncheons, trade shows or Christmas parties,” says Jim Breyer, managing partner of Accel Partners. “There was this feeling of, here are the junior people and here are the senior people. People like Eugene Kleiner, Burt McMurtry and Pitch Johnson have always gone out of their way to assist people entering the business and provide guidance and insight.”

Kleiner remained an active angel investor in startups like Biometric Imaging and Raven Bio Technologies. That he didn’t fund another Genentech didn’t seem to matter. It was more about the process of building.

It all goes back to engineering, says Robert Kleiner. “Whenever he was asked what he did for a living, whether it was filling out a form in a doctor’s office or meeting someone new, he always said, engineer.’ He never said businessman’ or venture capital guy.'”

Kleiner left a lasting impression on the technology and venture capital industries, but his son remembers him for something less grand. “As busy as he was and as successful as he was, he was always home for dinner,” he says. “If he was in town, we always ate dinner together. Now I wonder, wow, how did he do that?”

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