con't.....(of a trip down memory lane)...
that the value of good companies peaks in years five through 10.
Former employees cite many reasons for the failure of Excite At Home -- a
relatively inexperienced chief executive, a series of bad acquisitions that nearly
wiped out the company's cash reserves, board members who represented
cable companies, specifically AT&T Corp., that sometimes had different
interests. More than a few believe the idea of merging a Web portal with a
cable company was flawed from the beginning.
Regardless of who is to blame, the impact on shareholders was the same:
Those who believed in Doerr's optimistic view wound up losing everything.
No More Predictions
In recent months, Doerr has all but gone into hiding. Kleiner, like other
surviving venture capital firms, continues to invest but does so much more
conservatively. Some of Kleiner's limited partners are upset with the firm
because returns are negative. The trade press has begun to write only about
Kleiner's failures rather than about new companies Kleiner is funding.
Doerr, like practically every other director of a public business that has been
suffering from the stock market's downturn, must now contend with corporate
fraud lawsuits and government investigations into Kleiner-backed companies.
He is being sued by shareholders of Amazon, Freemarkets, Drugstore.com
and Martha Stewart Living Omnimedia Inc. At least three Doerr-backed
firms, Martha Stewart, Homestore and AOL, are being scrutinized by
regulators.
University of Wisconsin law professor D. Gordon Smith believes that most of
the flurry of lawsuits against venture capitalists such as Doerr are unfounded.
"When something bad happens we wonder whether someone was evil or
stupid. I think it's pretty clear that most of the VCs were not in the first camp.
They were not manipulating markets," Smith said. "What they were doing was
taking advantage of the situation."
Former congressman Rick White, a Republican from Washington state and a
friend of Doerr's, insists that Doerr's views are essentially unchanged. "We
don't talk about the New Economy anymore," White said, "but Doerr is a guy
who still believes there is a physical power in tech."
The past few times Doerr spoke to a public audience, earlier this year and in
2001, he gave almost identical speeches. He started by saying he had come
with "somewhat of an apology" for some of his previous comments. He then
flashed slides of his famous "greatest legal creation of wealth" quote and
revised it to say "greatest legal creation (and evaporation) of wealth."
But what may be more telling is what he is not saying.
Doerr has stopped trying to predict the future. There isn't, and hasn't been for
some time, talk of the next new thing in technology.
Researcher Richard A. Drezen contributed to this report.
© 2002 The Washington Post Company |
