Kleiner Perkins Caufield & Byers partner Ellen Pao is suing the venture capital firm alleging sexual harassment and discrimination, according to a lawsuit filed earlier this month in California Superior Court.

The lawsuit paints a picture of a firm where complaints against harassment went ignored, where a senior partner suggested that marrying the alleged harasser might be the solution to Pao's difficulties, and where women were labeled "buzz" kills.

Pao is asking for compensatory damages, including lost pay and bonuses; punitive damages; and a court order to prevent sexual harassment and discrimination at Kleiner.

"The firm regrets that the situation is being litigated publicly and had hoped the two parties could have reached resolution, particularly given Pao's seven-year history with the firm," said Kleiner spokeswoman Christina Lee.

"Following a thorough independent investigation of the facts, the firm believes the lawsuit is without merit and intends to vigorously defend the matter," said Lee.

Pao, who joined the firm in 2005, alleges that the firm engaged in systematic discrimination against women, for example, allowing female junior partners fewer board seats and investment sponsorships compared to male junior partners, and allocating women a smaller percentage of profits.

Kleiner originally hired her as chief of staff to John Doerr, a green-technology investor who is perhaps the best-known of Kleiner's partners. She was viewed as a rising star at the firm, at one time accompanying Doerr and author Thomas Friedman on a scouting tour in Brazil.

TechCrunch, a blog, first reported the lawsuit.

Venture capital is a clubby, male-dominated world, but sexual harassment lawsuits are rare.

Pao alleges that former Kleiner partner Ajit Nazre made repeated sexual advances to her. She eventually engaged in sexual relations with him on "two or three occasions" but in 2006 told him she would no longer have a personal relationship with him, the lawsuit says. Nazre worked to retaliate against her once she rebuffed him, the suit alleges.

Nazre did not return a phone call requesting comment.

When she complained to senior partners about the inappropriate behavior, including Nazre's failure to include her in meetings and on email chains, they reacted in a way she found unsatisfactory, the suit states. For example, managing partner Ray Lane suggested she marry Nazre; the firm also asked her to move to the China office, according to the suit.

Pao also said partner Randy Komisar had engaged in inappropriate behavior, including giving her an inscribed copy of Leonard Cohen's "The Book of Longing" one Valentine's Day. The book contains poetry with sexual content.

Last year, partners at the firm organized two all-male dinners for select partners, executives at Kleiner-funded companies, and a few other guests. One of the partners, Chi-Hua Chien, said women were excluded because they would "kill the buzz," according to the lawsuit.

A Kleiner spokeswoman, speaking on behalf of Chien, Lane and Komisar, declined to comment.

Kleiner was one of the first venture capital firms to hire female partners, Lee said. "The number of women partners at the firm is one of the highest within the venture capital arena and the firm has actively supported women in all respects," she said.

Pao is on the boards of green-materials company Lehigh Technologies, analytics company Datameer and social-news company Flipboard. Before joining Kleiner, she worked at business-software company BEA Systems and phone-applications company Tellme Networks.

Kleiner Perkins, founded in 1972, has backed firms including online retailer Amazon.com Inc, gaming company Electronic Arts Inc, biotechnology company Genentech, browser company Netscape, information-technology company Sun Microsystems, and gaming company Zynga Inc.

Its latest fund, the $525 million Kleiner XV, has 10 managing partners, including Chien, Doerr, and Komisar. It also includes a female managing partner, life-sciences specialist Beth Seidenberg.

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