Apple, Google, and Salesforce are household names, and so, too, are Steve Jobs, Sergey Brin and Larry Page, and Marc Benioff, their leaders—men who, according to legend, once upon a time started their world-changing companies with a combination of brilliance, luck, and, above all, swagger. But that’s not the full story. Women played a major role in creating the tech giants of today, and perhaps no one had a bigger impact than—and has been as overlooked as—the pioneering female venture capitalists of Silicon Valley.
In this exclusive excerpt from Alpha Girls: The Women Upstarts Who Took On Silicon Valley’s Male Culture and Made the Deals of a Lifetime, author Julian Guthrie introduces us to Mary Jane Elmore and Magdalena Yesil, at one time the only female partners at their venture capital firms, who invested funds, intelligence, and countless hours in the startups they worked with. These women (and the rest of the book’s trailblazing characters) had an outsize influence on the success of their companies, even as they and their cohort faced the blatant sexism of the day: unequal pay, harassment, and the proverbial glass ceiling—often while juggling family responsibilities. As if building a tech startup today weren’t hard enough, little of this has changed.
Here are their stories.
MARY JANE ‘MJ’ ELMORE: UNAFRAID TO DROP THE AX
MJ parked in her usual spot in the back lot at the Institutional Venture Partners offices and walked past the sprawling oak tree. It reminded her of a tai chi practitioner, its limbs long and purposeful in their reach. She had finally got rid of her Ford Pinto, selling it online. On rare occasions when she spotted an old Pinto in the land of German sports cars, she was reminded of what it was like to first drive up Sand Hill Road, looking down through the rusted-out floorboards.
MJ headed into the lobby of Building 2, graced by a large artwork depicting a slightly torn and burned thousand-dollar bill, titled Burn Rate. MJ, one of the first women in history to make investing partner at a VC firm, had been at IVP for more than a decade now. She had come of age professionally in the 1980s, a boom time for venture capital. The growth began in earnest when IVP founder Reid Dennis—along with fellow VCs Pitch Johnson, Tom Perkins, and Bill Draper—successfully pushed Washington lawmakers to lower the taxation on profits from sales of investments. Some of the biggest companies to go public during this time were Genentech, Compaq, Apple, Oracle, and Microsoft.
When MJ came aboard in 1982, one of the first deals she and Dennis landed was a startup called Sequent Computers. MJ knew Sequent cofounder Scott Gibson from her Intel days. When she briefed Dennis on the deal and mentioned “there are a lot of venture guys after them,” Dennis looked at his watch, made a few calls to rearrange his schedule, and said, “Let’s pay them a visit.” So they flew in his twin-engine Cessna to Beaverton, Oregon. Hours later MJ and Dennis left Oregon with a deal: IVP would invest $5.2 million, giving Sequent a pre-money valuation of $15 million. (Pre-money is the value of a company or asset prior to the investment.) They had nothing in writing, but Gibson trusted MJ from their days at Intel and knew Dennis’s reputation. His handshake was considered golden. Now in 1996, Sequent had more than $800 million in annual revenues and partnerships with Oracle, Boeing, and Siemens AG, among others.
IVP now had more than $187 million under management in its seventh fund. The VC firm had helped finance, build, and take public 80 companies, collectively employing more than 100,000 people, generating $10 billion in annual revenue, with a market capitalization of more than $20 billion. MJ and Dennis hired all the new partners. They established three areas of investment expertise: early-stage infotech, late-stage infotech, and life sciences. MJ’s focus was primarily on the fields of software, communications, and computer-aided engineering. She had invested IVP funds in Applied Digital Access, Aspect Communications, Bridge Communications, Frequency Software, Netrix, Red Pepper Software, SuperMac, SynOptics, Unify, and Weitek.
Entering the IVP offices, MJ greeted her secretary, Andi Heintz, grabbed coffee, and closed her door. Sipping coffee in silence was her tai chi, her Zen moment. Work was the only place where she could finish a cup of coffee. Here challenges came at her one at a time.
Finishing her coffee, MJ welcomed Heintz in for a quick debrief before the partners’ 8:30 pitch meeting. Heintz had started at IVP in 1984; MJ had been her first female boss. MJ was also the only partner who kept her own schedule and got her own coffee.
Silicon Valley was in the middle of another economic boom, this one whipped up by the potential of the internet. And like a computer chip, MJ’s mind would process the divergent pieces of her typical day, from pancakes to pitches to lights-out. Her former Intel boss, Gordon Moore, had famously predicted that computing power—the number of components that could be packed onto a silicon chip—would double every year. His prediction became known as Moore’s Law. The same exponential growth was taking place in Silicon Valley. The Valley had started with two guys, William Hewlett and David Packard, founding HP in a garage, and it was now the epicenter of startups with billions of dollars of venture capital.
“Just keep things moving,” MJ said to Heintz before the partners’ meeting began. The pitches would often run late, and the partners tended to get comfy. MJ was the only one in the room with a working spouse and children. With an endless stream of people and deals to consider, it was possible to work around the clock. When other partners wanted to spend more time considering a deal, MJ was often a quick no. When the men juggled six to eight startup deals, MJ focused on a few propitious ones. Good judgment and time management became her secret weapons. When it came time to fire a CEO or the founder of a nascent company for persistent problems—when the problems had long been agonizingly obvious—she wasn’t afraid to drop the ax. VCs had a reputation for being quick to fire, but MJ had found the opposite—they always waited too long. Venture capitalists wanted their entrepreneurs to succeed.
MJ had already waited too long when she met with one of her entrepreneurs who had founded an electronic design automation company. Only 28 at the time, MJ had been named a partner at IVP and she was the lead investor in the EDA company. She had summoned the fortysomething founder to her office to discuss the company’s problems, including certain, to put it delicately, personnel issues. There sat the founder, who was always impeccably dressed and spoke with a thick and mellifluous accent. His eyes had a habit of wandering south.
MJ wasted no time. He was dating a female application engineer who worked for him. MJ told him what she knew and touched on other problems at the company. Without further ado, she said, “You’re fired.”
The founder looked shocked, then indignant. “I’m not going to be fired by a woman,” he said.
MJ almost laughed. He was fine being funded by a woman but wouldn’t be fired by a woman. She glanced behind her and to the side. “Well, I don’t see anyone else here, do you?” she said. “You are fired.”
MJ eventually unloaded the company for $1.39 million, at a loss to IVP of more than $1.4 million. But no one was complaining.
Over the years, in fact, MJ’s quick dispatching of the founder had become the stuff of legend, often recounted at get-togethers among Heintz and her fellow secretaries at other firms. They called themselves the VVCAs—the Vivacious Venture Capital Assistants. Every few weeks, they would gather after work for drinks and to dish out gossip. They talked about partners at their respective firms, about the affairs, the houses, the exotic trips, the picky eaters, and the ones who needed their laundry retrieved. They rolled their eyes at the story of a VC who called from vacation to ask his assistant to clean the dog poop in his backyard.
MJ looked at her watch—it was time for the partners’ meeting to begin. She headed into the conference room, while Heintz returned to her perch in the hallway. Petite, blond, and outgoing, Heintz watched as everyone went in and took their seats. Reid Dennis wore his trademark suit and bow tie.
Heintz hadn’t immediately taken to MJ, who came across as an iron maiden in her gray, navy, and black suits, white blouses, nylons, and practical pumps. The purpose of the uniform, Heintz gradually came to understand, was less to look masculine than to avoid looking feminine. Heintz, who had once worked for the chief psychologist at the Langley Porter Psychiatric Hospital and Clinics in San Francisco, was intrigued by MJ and by the gender dynamics that played out at work. She had seen that women’s success and likability were often negatively correlated; as one factor went up, the other went down.
Heintz’s perception of MJ had really changed when she became a mom. Heintz had assumed that MJ was too career focused to have kids, so she was shocked the day MJ confided that she was pregnant. As the first woman partner at IVP, MJ had to establish a precedent of maternity leave, and she took three months off with each child. And through it all, her career continued to prosper.
By this time, Heintz knew MJ well enough to know that she was a sensitive woman wearing an impassive mask and a suit of armor. She had flourished in the Darwinian game of natural selection that played out every day on Sand Hill Road. As Heintz peeked into the conference room, she could feel herself rooting for her boss. She was a modern version of Melanie Griffith’s character in Working Girl, minus the industrial-strength teased hair.
MAGDALENA YESIL: ‘THERE ARE NO BARRIERS’
Magdalena was having lunch at the Peninsula Golf and Country Club in San Mateo with a young star at Oracle, Marc Benioff. The two had become friends when the database giant had become CyberCash’s partner, selling its server software to banks. Benioff, a senior vice president at Oracle and a trusted friend of the company’s hard-charging billionaire cofounder Larry Ellison, often sought out Magdalena’s counsel. He trusted her advice completely.
Speaking softly—the country club terrace was a techie hangout, and he didn’t want to be overheard—Benioff said, “Tom [Siebel] and I have been discussing the fact that small- and medium-size companies cannot afford Siebel’s software and that a subset of Siebel Systems functionality would serve them well. The small-to-medium-size enterprises can’t spend a million dollars to sign and another million to implement, so it has to be a hosted offering. But I think Tom is worried about cannibalizing his business.” Benioff added, “I think the idea—delivering business applications as a service over the internet—is great and even large companies would prefer it if it did not require millions of dollars and a year to implement.”
After a pause, he asked, “What do you think?” “I think it’s a great idea,” Magdalena said without hesitation. “I think enterprise software, with its multimillion-dollar price tags for license and implementation, will go away over time.” She had long been convinced that “big and clunky” networked software companies would soon be replaced by nimbler pay-as-you-go software as a service, where a business could buy only the software it needed, as it needed it. “We need software that is ‘pay by the drink,’ ” she said. Benioff asked, “So should I do this?” And “Can I do this on my own?” Magdalena smiled seeing the startup sparkle in his eyes. “Yes, and yes,” she said. “And I’m going to help you in every way I can. I will invest, raise money from VCs, help you hire, and help you sell.”
Benioff had recently taken a six-month sabbatical from Oracle to practice meditation in Hawaii and travel to India to visit ashrams and learn from spiritual masters. A highlight of his time in India was meeting Mata Amritanandamayi, known as the “hugging saint” because she had embraced an estimated 25 million people. Benioff returned to the States and to his job at Oracle wanting to build something of his own. He believed the internet was the way of the future, and he intended to integrate his love of technology with his newfound belief in service. Magdalena knew that the spirit of entrepreneurship had always been a part of Benioff’s life. When he was a teenager, he and a few friends started a company called Liberty Software to make adventure games for the Atari 800. He earned extra money going to people’s homes to repair antennae and CB radios, and he worked for Apple Computer the summer before his junior year at the University of Southern California. Largely unsupervised, Benioff started writing software for a game about raiding IBM’s headquarters. His manager at Apple said the game wasn’t appropriate and later suggested that Benioff consider a job at Oracle. They had the best salespeople in the world, he was told. In his first year at Oracle, Benioff was named rookie of the year.
After lunch at the country club, Magdalena jumped on a call with Benioff and Parker Harris, who was running a software programming and consulting company called Left Coast Software with two engineers. Benioff wanted to recruit him, but Harris was worried about getting buy-in from his partners. Harris’s team thought the software would be too easy to write, given their years of experience in the field of customer-relationship management.
Harris asked Magdalena, “Why do you think this company will win? What are the barriers to entry?”
“There are no barriers,” Magdalena said. “You have to run faster than everyone else. And execute better. That is your only defense—better execution than everyone else.”
Soon a small team—including Parker Harris, Frank Dominguez, and Dave Moellenhoff—began working out of a one-bedroom apartment Benioff rented next to his own flat on the top of Telegraph Hill, a stone’s throw from Coit Tower. They used card tables and folding chairs for desks, and kept a lifetime supply of Red Vines licorice on hand. A picture of the Dalai Lama hung above the fireplace. Benioff, who signed all of his correspondence with “aloha,” was still employed by Oracle, but turned his energies to building his startup. Magdalena did the same, working her day job at U.S. Venture Partners while throwing herself back into startup fever in the evenings.
At home, she juggled her mother, her husband, Jim—who was busy with his own career as an attorney—and her boys, Justin, 11, and Troy, 9. Her older sister and her niece and nephew cycled in and out of her responsibilities. She hired a “manny”—a male nanny—once it became clear that her boys were overpowering their female babysitters, like Gulliver overtaken by the Lilliputians in Gulliver’s Travels.
Jim played easygoing California dad to Magdalena’s disciplinarian European mom. Jim and the boys did the fun things together, hanging out at Jim’s ranch, where they took care of animals, drove ATVs, operated heavy machinery, and got dirty and dusty. Magdalena was the one who checked homework and pushed the boys to do better. The couple rarely argued, but still their styles were markedly different.
She attended PTA meetings and ran school auctions and fundraising events. She took collecting $15 for a gift for a coach as seriously as she did handling a million-dollar investment. Everything that got budgeted and scheduled got done. When the other parents began debating school decorations—orange, purple, or sparkly—Magdalena walked out, leaving such details to others.
The boys had a vague sense of their mom’s professional life. One weekend afternoon in Palo Alto, Magdalena took Justin and Troy and Justin’s friend to a café. As Magdalena waited at the counter to order, a woman at the table next to her kids leaned over and asked, “Is that Magdalena Yesil?” The woman had seen Magdalena on TV talking about e-commerce. Justin’s friend was the first to reply, saying, “No, that’s Justin’s mom.”
After the kids were in bed, Magdalena made a beeline to her office or to the kitchen table to get in a few more hours of work. One night a fax came in that Jim brought her, sent by Marc Benioff. At the top of the fax were Larry Ellison’s and Magdalena’s names.
“What are you doing with these guys?” Jim asked, studying the fax.
“I’m building a company,” Magdalena replied. “To be called Salesforce.com.”
Julian Guthrie is the author of The Grace of Everyday Saints, The Billionaire and the Mechanic, and How to Make a Spaceship. She lives in San Francisco. Alpha Girls is her latest book.
Adapted from Alpha Girls: The Women Upstarts Who Took On Silicon Valley’s Male Culture and Made the Deals of a Lifetime © 2019 by Julian Guthrie. To be published by Currency, an imprint of Penguin Random House LLC, on April 30.
