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Exclusive: Kleiner Perkins makes major changes

By
Dan Primack
Dan Primack
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By
Dan Primack
Dan Primack
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October 11, 2013, 3:23 PM ET

FORTUNE — Kleiner Perkins Caufield & Byers is making some major changes to its early-stage investment practice, Fortune has learned.

The venerable VC firm this week sent a memo to its limited partners, explaining that its active early-stage funds will be led by a group of just five managing directors (who also will serve as the funds’ investment committee). The quintet consists of: John Doerr, Ted Schlein, Randy Komisar, Beth Seidenberg and Mike Abbott.

The memo reads, in part:

“When we met with you earlier this year, we discussed KPCB’s efforts to increase coverage of new opportunities and to ensure every investment competes for the same, limited pool of capital.  Moreover, we discussed our belief that smaller, more focused funds together with smaller investing teams will deliver the highest returns.”

To be sure, Kleiner Perkins is currently raising smaller early-stage funds than it has in the past. For example, its 15th fund (raised in early 2012) came in at $525 million, compared to $650 million for its predecessor and $950 million for Fund XIII. But it’s a bit unusual to see this sort of management shrinkage 17 months or so after the fund closes, rather than beforehand.

As you may recall, the Fund XV raise was already notable for who wasn’t included on the general partner list (Brook Byers, Ray Lane and Bill Joy) – but those moves seemed to imply that the firm was putting some emphasis on youth. The new changes seem to go in the opposite direction, with Abbott as the next-gen partner. Not necessarily a positive or negative. Just a bit surprising.

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Those left out include Matt Murphy, Chi-Hua Chien, Amol Deshpande and Trae Vassallo (not to mention former EA exec Bing Gordon, who leads the firm’s sFund). All of those folks are said to be remaining as “general partners” of Fund XV, but won’t be making final investment decisions. It’s unclear if some of them will take on greater growth equity responsibilities.

I’ve spoken to several Kleiner Perkins limited partners who expressed neither approval nor disapproval of the moves. Nor even too much surprise (there was a sense that some shakeup was imminent). Instead, there were just lots of questions about why certain decisions were made – and an expectation that they’ll get answers during a special call with the firm later today.

In related news, longtime Kleiner Perkins partner John Denniston has resigned to lead a Bay Area nonprofit called the St. Vincent De Paul Society.

We hope to have more on all of this after the LP call concludes.

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