"In interviews, some entrepreneurs and limited partners - the pension funds, endowments and family offices that are the lifeblood of any venture fund - have expressed concern about Kleiner." - Deborah Gage and Jeff Elder, "Sex-Bias Trial Takes Big Toll on Kleiner," The Wall Street Journal, March 24, 2015. Here is the article.
In any business in which secrecy is part of the ethos, anything which triggers exposure will not be forgiven. Kleiner's mortal sin was that it allowed the situation with Ellen Pao to make it to the public arena of a trial. From the get-go, such as having the management judgment not to hire Pao, it should have been on top of things.
But it wasn't. Now it stands naked in front of the world. Among the media there are Chinese reporters. No question, in perception, it has become damaged goods. As the WSJ points out, some entrepreneurs are sticking by Kleiner. But, in general, not too many powerful players want to be associated with a venture capital firm which has been in the intense media spotlight for a month.
Things could get a lot worse if the jury doesn't acquit. One juror asked Pao, through the judge, why she wanted to "punish" Kleiner. Yes, that term was used. Well, even if she isn't awarded money, Pao has indeed punished Kleiner
The good news is that top public relations firms know exactly the strategies and tactics for reputation restoration.
Initially, the situation will be framed as a crisis. Kleiner leadership will have to listen and comply with the public relations mandates. Then, there will be a longer-term plan for fresh branding.
Soon enough, Kleiner will be written up in case studies by public relations experts and business schools about how to engineer comebacks. "Pao v. Kleiner" will be off the radar, just as the Rhode Island lead paint class action public nuisance litigation vanished a few years after the RI Supreme Court tossed it Download Statev.LeadIndustriesAssoc.,Inc. Until then, though, the defendants such as Sherwin-Williams took profound hits both in stock price and public perception.