kevingfong.jpgKevin Fong, partner at Silicon Valley’s Mayfield Fund, is leaving the firm, VentureBeat has learned.

The move is significant because Fong was one of the first high-profile Asian venture capitalists in the valley. He was considered a rising star in Silicon Valley two decades ago, when he was first groomed to lead the firm. The departure was formalized Friday, after a consultation with the firm’s limited partners.

Fong and his colleagues had some early hits (Redback, for example) that helped bring Mayfield into a class of top-tier Silicon Valley venture firms. It was mentioned in the same breath as Kleiner Perkins, Sequoia, Accel and Benchmark.

But since the initial Internet boom ended in 2001, the firm has struggled — and its difficulties reflect the challenges of the entire VC industry. Mayfield had specialized in building the large internet infrastructure companies during the early years, but failed to adapt as the industry has moved on. We reported on the firm’s rocky times: Fong, as one of the firm’s recognized leaders, promised more than two years ago the firm would do better. It has certainly tried. It has hired several younger partners, and has expanded into China and India. It has seen several companies get sold or go public, but they haven’t been the massive hits that its investors like. Fong himself has seen few of his companies do well lately. 3Par, a storage company, did go public, but that company’s stock has declined markedly since going public in November, albeit along with the rest of the market. It’s not clear whether Mayfield will make money on the deal, because it joined other investors to pump more than $180 million into the company over many years. Tasman, another company pumped full of money and kept on life-support for years, sold at cost in 2006.

It’s also not clear whether Fong was pushed out or left voluntarily. In the valley, it’s a cliche that the only constant is change. Fong ushered in major change in the VC landscape, helping bring much needed diversity to the Sand Hill Road investing community — and he deserves credit for hire a diverse group of other partners too. It’s also true that a venture capital firms needs to renew itself to adjust and thrive, and so the move to allow a newer generation to take over is no doubt a good one.

We’ve contacted Mayfield for comment, and expect to update shortly after hearing from Fong or his partner Yogen Dalal.

Update: Dalal took the call, and confirmed the departure. Fong wanted to spend more of his time in China, Dalal said. He’ll stay on the investment committee for GSR II, a joint venture Mayfield runs in China. Dalal said limited partners were fine with Fong’s decision to leave, but hadn’t demanded it. Dalal said the rest of the team is committed, and that the firm has done well over the last year. Dalal recruited younger partners Raj Kapoor (former CEO of Snapfish) and Navin Chaddha, who has done well (top ten on Midas List). The firm plans to raise another fund next year.