KP Holds First (Perhaps Final) Close as Khosla Goes PT

Kleiner Perkins Caufield & Byers has held a first close on what looks to be a $400 million fund, a source close to the firm says. At the same time, KP has undergone some minor changes in its general partnership.

GP Vinod Khosla, one of the firm’s top moneymakers, has gone part time, while GP Tom Jermoluk’s all-to-brief tenure with the firm has officially ended.

The staffing changes are expected to have little impact on the remarkably successful firm, which will likely add a Google IPO this year to its long list of accomplishments.

PE Week was the first to report last November that Kleiner was talking to limited partners about raising a new fund. It raised its last fund in 2000. Bloomberg News reported on Feb. 17 that KP had in fact raised $400 million for the fund.

A source close to the firm says that KP “for sure had its first close,” and it may be the final close since Fund XI was smaller than the previous fund. KP has not yet finalized a sidecar fund, which it typically sets up for individual friends of the firm.

KP partners did not respond to requests for comment. (Khosla was out of the country and couldn’t be reached for comment last week.)

The San Jose Mercury News reported on Feb. 14 that Khosla would invest for KP’s new fund on a part-time basis. The newspaper said Khosla is making the shift because he wants to spend more time with his kids and “pursue philanthropic interests in his native India, and [possibly] do some investing in companies there.”

The source PE Week spoke with said he wouldn’t read too much into Khosla going part time. For one, “One hour a week of Vinod Khosla is worth a full week of work for a typical VC,” he says.

For another, Khosla went part-time before and ended up funding Juniper Networks and Cerent, two huge hits for KP, he adds. Khosla may in fact have plans for non-VC related activities in the near term, but if he comes upon an exciting startup he’ll be right back in the game, because that’s where his passion lies, the source says.

Khosla was scheduled to trek to India on Feb. 20 to meet entrepreneurs and help relaunch the Hyderabad chapter of The Indus Entrepreneurs (more commonly known as TiE. Khosla’s assistant said he was already traveling as of Feb. 18.

Khosla, 49, ranked second on Forbes magazine’s “Midas List” this year, down from the No. 1 spot a year earlier, but still two notches above KP’s best known GP, John Doerr.

A co-founder of Sun Microsystems 20 years ago, Khosla has hit home runs with telecom equipment companies Juniper, Cerent, Corvis, and Extreme Networks.

Another source close to Khosla says that he has wanted to do something significant to help his homeland for some time. Khosla recently donated $5 million to his alma mater, the Indian Institute of Technology in New Delhi.

Back in 2000, Khosla was part of a group that proposed raising $1 billion to create The Global Institute of Science and Technology (GIST), an insitution in India that would partner with U.S. universities. It’s unclear what happened with the proposed initiative. The last mention PE Week could find was a story posted on the online site South Asian Women’s Forum in October 2000. That report said GIST had raised or received commitments for $500 million from Indian- American entrepreneurs and hoped to start accepting students in 2003.

Khosla’s future plans in India – and how they will impact KP – will almost certainly be a key topic of conversation between the firm’s GPs and LPs.

Limiteds are much less likely to fuss over the departure of Tom Jermoluk, aka “TJ.” He left the firm late last year to work with longtime friend and KP investor Jim Clark on a Florida real estate venture, according to the Mercury News. The source PE Week spoke with says that Jermoluk hasn’t been active with the firm for about a year. He is no longer listed on Kleiner Perkins’ Web site.

KP made a big deal when Jermoluk, former chairman and CEO of Excite@Home, joined the firm. “This is AWESOME,” Doerr declared in a rare KP press release on May 10, 2000. “The KP team is thrilled that Tom is joining us. TJ will be invaluable to KP ventures.”

Despite the hype, Jermoluk’s stay with the firm was unremarkable. He was an investor and board member in a few deals that left dents in the firm’s sterling reputation. His biggest flameout was Excite@Home, which was essentially swallowed by AT&T after it filed for bankruptcy protection.

Jermoluk and KP also backed Kibu, the self-described “digital hangout for teen girls” that took in $22 million in VC before it shut down, as well as MyCFO, which raised about $90 million in venture funding (and was once given a pre-money valuation of $250 million) before being sold to BMO Financial Group for $30 million.

Two more TJ deals that KP can only hope to exit from are SmartPipes, an Internet provider that has taken in $92 million in VC, and Shutterfly, an online photo site that snapped up $70 million in venture funding.

Besides SmartPipes and Shutterfly, Jermoluk also sat on the boards of IPUnity, and AOptix for KP.