Paul Kedrosky has a nice post commenting on today's NYT story, which reported that Colin Powell was joining the legendary VC firm Kleiner Perkins.  PK notes that

Top firms like Kleiner are not resting on their laurels; they are actively working to protect their position by doing all the yucky product marketing & branding things that bring deals to the door. People scoff at this sort of thing at their peril.

I actually don't want to overplay the branding angle.  Powell brings a lot of actual non-marketing value to the table, primarily through networking ability.  It's hard to imagine anyone in the world not taking his call.  If the firm wants to bring a defense contractor into the syndicate, Powell will know who to call.  There is also, I am told, a huge market for nanotechnology in military and security-related markets.  Powell may be able to offer some specific guidance and sit on the boards of portfolio companies. 

So this deal is not just about improving the brand image of Kleiner Perkins --- though Powell undoubtedly helps that too.

For more on the importance of reputation in venture capital, see my papers here and here and here.

UPDATE:  Genuine VC has more here.  The real puzzle, he suggests, is why Powell is interested in venture at all.  It's got to be more than money.  My speculation is that Powell shares my belief that there' s something special about venture capital, the way it drives economic growth and the positive externalities of new, disruptive technologies.  The nanotechnology created to shield military personnel might be used next to protect firemen or cops, or to shield civilians from terrorist bombs.  Who knows.  So, given a choice between working for Kleiner and its exciting portfolio companies on the one hand, and working for a defense contractor on the other, the psychic benefits of working for Kleiner were higher.  Just a guess.
 

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