MAY 2001

Last spring, when raising funding for Moreover, the web intelligence company that I co-founded, we pitched Benchmark Capital. To anyone outside the world of technology that may not mean much. But the time was April 2000, the place was Sand Hill Road, and this was as good as it got.

The Benchmark offices, on Silicon Valley’s equivalent of Wall Street, were plush in a dress-down, ground-scraping, west coast way. The assistants, all beautiful, lulled waiting entrepreneurs with charm and cookies. The conference room, where business plans were picked apart, had James Bond automated window blinds, and – gasp! – a display socket embedded in the table.

Benchmark partners were not just venture capitalists at a time when venture capital had eclipsed investment banking in prestige. They were gods. They had the multi-billion-dollar successes of eBay and Ariba behind them, a glowing profile in Business Week and Randall

E Stross’s account of their meteoric rise, eBoys. It was the hot firm of Sand Hill Road.

And the seven partners looked the part. All over six

foot. David Beirne, the former headhunter famed for luring Jim Barksdale to Netscape, looks like the Aryan ideal. When asked how he could manage 11 board seats (the other partners had only eight) he answered:

‘I have more testosterone than they do.’ Then there was Bill Gurley, a former basketball player, intellectual godfather of the net market while still a 20-something analyst and journalist; so tall and confident that his column in Fortune was called ‘Above the Crowd’.

In the US, and specifically Silicon Valley (unlike Britain), success is celebrated, and failure seen either as the occasional price of success or the precursor to it. In Silicon Valley, you buy personal reputations as you buy technology stocks: on the dips.

But this decline in technology valuations has been more than a dip. Internet rumour sites speculate that Benchmark’s boomtime fund might actually lose money for investors. And internet gossip columnist Chris Nolan spread a story that Gurley and Beirne might both be leaving Benchmark.

Now, VC partnerships do not disclose their investment returns to the media, and Benchmark pooh-poohs the story about departures. eBay, Benchmark’s flagship internet investment, has withstood the market correction better than any other significant dot.com.

Nevertheless, the icons of the technology boom are subject to a much more critical press than at any time in the past 10 years. It is almost as if reporters and investors are making up for the easy ride they gave them in 1999 and 2000. Cases in point:–

Tim Koogle – CEO of Yahoo!

– was seen as the ideal internet company career executive. A big-company background, but enough of a hippy to bond with the portal’s young founders. Yahoo! is now looking for a new CEO from traditional media.

Jeff Bezos, CEO of Amazon, was Time’s Man of the Year. He is now subject to stories about insider selling. His braying laugh, once thought endearing, is now described as annoying.

Mary Meeker usually topped those ‘most influential women in technology’ lists. She, like most other internet analysts, is now ridiculed for issuing buy-recommendations throughout the decline in tech share prices.

Jay Walker, once credited for reinventing price-setting with Priceline’s reverse-auction model, now fields questions about his personal finances.

Dave Perry, who turned an MBA into a B2B exchange called Chemdex and a paper-money billion, has had his fortune wiped out. And Eric Greenberg, founder of Viant and Scient, was revealed by eCompany Now magazine as a fabulist who neglects his mother.

So who still commands respect? I’ve heard people talk flatteringly about porn and gambling entrepreneurs: at least they address real consumer demand. Some VCs, such as Jim Breyer of Accel, were sceptical enough of dot.coms to reap the credit now. The same goes for Warren Buffett, who stayed away from technology stocks because he said he did not understand them.

Hard-core technology also brings credibility. Bill Gates and Steve Ballmer are riding high: Microsoft is one of the few companies driving innovation, and Silicon Valley, like a runaway teenager returning home, is now more deferential.

Vinod Khosla, the Kleiner Perkins partner who invests in obscure optical networking companies that get sold for billions, is the venture capitalist of choice for the Silicon Valley business magazines.

Unfortunately, they lined him up for the front covers before Cisco’s revenues started to suffer, and the bottom fell out of the optical networking sector. Time for another icon to fall?