Search
Social+Capital Partnership Founder Chamath Palihapitiya Interview
Chamath Palihapitiya Photograph by David Paul Morris — Bloomberg/Getty Images

Exclusive: Kleiner Perkins tried to ‘acquire’ Social+Capital Partnership

Jan 26, 2015

Venture capital stalwart Kleiner Perkins Caufield & Byers recently tried to “acquire” Social+Capital Partnership, a Palo Alto-based VC firm formed in 2011 by former Facebook (fb) executive Chamath Palihapitiya, Fortune has learned. The talks ended within the past few weeks, and are now considered to be dead.

Under terms of the proposed deal, Palihapitiya and fellow S23P general partners Ted Maidenberg and Mamoon Hamid would have become partners in KP’s venture capital practice, effectively creating its next generation of leadership. You might recall that KP basically bailed on its prior group of “next-gen” leaders, via a late 2013 house-cleaning that came shortly before a new fundraise.

It is unclear how the S23P partners would have been integrated into the new fund’s structure, or if some of KP's current 5-person management group would have stepped down to make way. Also unclear is how the financial transaction would have worked, vis-à-vis the intrinsic value of S23P and the various interests in the firm’s two existing funds (the most recent of which was capped at $275 million). We've seen these sorts of deals sometimes in the private equity space, but almost never in VC-land.

Perhaps all of those question marks were just a bit too much for either side to handle since, as I said in the lead, it appears that this deal is not going to happen. One sticking point, I'm told, is over how much operational control Palihapitiya would (or wouldn't) have at the outset. Too bad, because it would have been fascinating to watch as both a Sand Hill Rd. experiment and as a possible example to other legacy firms in need of fresh blood.

Moving forward, expect KP to continue recruiting new senior talent for its VC firm (via more traditional means) and for S23P to begin raising its third fund sometime this spring.

Neither firm agreed to comment on the negotiations.

Sign up for Term Sheet, Fortune's daily newsletter on deals and deal-makers.

All products and services featured are based solely on editorial selection. FORTUNE may receive compensation for some links to products and services on this website.

Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: http://www.djindexes.com/mdsidx/html/tandc/indexestandcs.html. S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions