Switching from finance

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Switching from finance

Postby Anonymous User » Mon Jan 16, 2017 6:08 pm

I'm a jr associate (less than 2 years) in CA doing leverage finance and am thinking about switching to either general corp or EC/VC work. Got few questions...

1. I'm starting to gather from TLS postings that EC/VC work (especially EC) can become very repetitive. How much truth is there to this?

2. What are the usual exit options for those that mostly represent VC? I wouldn't think VC funds would normally have an in-house team due to their lean staffing. How easy/difficult is it to turn to the business side (i majored in finance but never took on a quantitative analysis job)? What are ways that I can prove that I have the quantitative skill set to succeed as a VC associate?

3. What are the usual exit options for general corp at prestige CA office (I'm looking at Mofo, OMM, Sidley, Orrick)

4. Lastly, how is Orrick's transactional practice rated in California? I know they have good IP lit practice but wasn't sure about m&a/ec/vc/tech trans area...

Thanks

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Re: Switching from finance

Postby Anonymous User » Tue Jan 17, 2017 6:15 pm

bump

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Re: Switching from finance

Postby Anonymous User » Thu Jan 19, 2017 12:02 am

Anonymous User wrote:bump


Also curious as a mid-level associate trying to move out of finance to broader transactional practice.

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Re: Switching from finance

Postby Anonymous User » Thu Jan 19, 2017 4:15 pm

I'll try to answer what I can. I'm a junior working for one of the valley firms.

First of all, idk how easy it is to lateral into a EC/VC practice without experience. My feeling is that there are a lot of us with that experience in various class levels kicking around CA at this point. General corp may be more viable but who knows!

1. I think, unfortunately, if varies person to person. I personally do not love the EC work that much but don't find it horrible. Some people at my firm seem to really like it. The problem is you are often negotiating the same five documents over and over (COI, SPA, IRA, Voting Agreement and ROFR). Those are the standard VC financing forms and there are often very "market" terms so they can be somewhat form-like. Sometimes you are negotiating warrants/convertible promissory notes. You are drafting tons of minutes and resolutions but these are often just cookie cutter or quarterly grants of equity options. This can get repetitive for some. There are a lot of more interesting things, and sometimes you will be doing M&A (small deals generally), but sometimes the interesting things can be even worse because things sometimes get "interesting" when a company has little leverage and the VC is trying to jam something down the company's throats. So negotiating gets a little more exotic in that case. I personally don't like that part either. People that like EC work will probably focus on the more interesting aspects. But I think what I described is generally a big part of any EC practice and for me that is enough not to love it. Some practices represent both EC and more mature companies. I find that kind of practice ideal. It's not that I hate EC stuff, just that if it is only EC stuff, I would not enjoy it as much.

2. I do not know because my firm is pretty EC heavy, as opposed to VC, but judging from my counterparts, I don't think exit options are great. I think it is probably better on the EC side by a bit. I don't get the impression it is easy to go business side. Maybe if you spend a couple years in a firm and a couple years as an analyst and have a JD/MBA but in that case you're basically just applying for a job at the VC, you're not really transitioning *because of* your VC representation. We've had partners transition once or twice a while ago but that doesn't happen that often either.

3. Don't really know, sorry. I think our firm is fairly prestigious for general corporate in the Bay Area and we send a lot of people to late-stage pre-IPO startups, recently public companies, major tech companies. We also always have a few that seem to go nowhere as well, but they're probably a minority.

4. I've seen Orrick getting a lot of love on this board recently, it seems. They're pretty good in certain areas I think. They do a lot of very early stage companies. I've heard it joked that we basically swoop all their companies as they get more mature and closer to unicorn phase and have seen it once or twice but idk if it's true as a rule. I've seen them on some M&A deals around the office but I honestly think they are probably 2nd or 3rd rate in that regard in the Bay Area at most. Think you could do a lot worse in terms of landing places in the Bay Area though.

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Re: Switching from finance

Postby Anonymous User » Thu Jan 19, 2017 4:22 pm

Any reason for these particular firms? My understanding is VC work is dominated by Cooley, Gunderson, and to a lesser extent, Latham in the valley? General corporate seems to be mostly WSGR, Fenwick, and to a lesser extent Mofo?

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Re: Switching from finance

Postby Anonymous User » Sat Jan 21, 2017 11:26 am

Anonymous User wrote:I'll try to answer what I can. I'm a junior working for one of the valley firms.

First of all, idk how easy it is to lateral into a EC/VC practice without experience. My feeling is that there are a lot of us with that experience in various class levels kicking around CA at this point. General corp may be more viable but who knows!

1. I think, unfortunately, if varies person to person. I personally do not love the EC work that much but don't find it horrible. Some people at my firm seem to really like it. The problem is you are often negotiating the same five documents over and over (COI, SPA, IRA, Voting Agreement and ROFR). Those are the standard VC financing forms and there are often very "market" terms so they can be somewhat form-like. Sometimes you are negotiating warrants/convertible promissory notes. You are drafting tons of minutes and resolutions but these are often just cookie cutter or quarterly grants of equity options. This can get repetitive for some. There are a lot of more interesting things, and sometimes you will be doing M&A (small deals generally), but sometimes the interesting things can be even worse because things sometimes get "interesting" when a company has little leverage and the VC is trying to jam something down the company's throats. So negotiating gets a little more exotic in that case. I personally don't like that part either. People that like EC work will probably focus on the more interesting aspects. But I think what I described is generally a big part of any EC practice and for me that is enough not to love it. Some practices represent both EC and more mature companies. I find that kind of practice ideal. It's not that I hate EC stuff, just that if it is only EC stuff, I would not enjoy it as much.

2. I do not know because my firm is pretty EC heavy, as opposed to VC, but judging from my counterparts, I don't think exit options are great. I think it is probably better on the EC side by a bit. I don't get the impression it is easy to go business side. Maybe if you spend a couple years in a firm and a couple years as an analyst and have a JD/MBA but in that case you're basically just applying for a job at the VC, you're not really transitioning *because of* your VC representation. We've had partners transition once or twice a while ago but that doesn't happen that often either.

3. Don't really know, sorry. I think our firm is fairly prestigious for general corporate in the Bay Area and we send a lot of people to late-stage pre-IPO startups, recently public companies, major tech companies. We also always have a few that seem to go nowhere as well, but they're probably a minority.

4. I've seen Orrick getting a lot of love on this board recently, it seems. They're pretty good in certain areas I think. They do a lot of very early stage companies. I've heard it joked that we basically swoop all their companies as they get more mature and closer to unicorn phase and have seen it once or twice but idk if it's true as a rule. I've seen them on some M&A deals around the office but I honestly think they are probably 2nd or 3rd rate in that regard in the Bay Area at most. Think you could do a lot worse in terms of landing places in the Bay Area though.



OP here -- this is very helpful. Really appreciate it. I guess one thing that I didn't disclose but does make a difference is that I'm working in LA now, though I may consider transferring to SF/SV in few year I wish to remain here for the near future. I'm also thinking that a practice representing both EC and mature companies would be ideal. In that sense, do you have firms that you would recommend down here in LA?

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Re: Switching from finance

Postby Anonymous User » Sat Jan 21, 2017 8:43 pm

Anonymous User wrote:I'm a jr associate (less than 2 years) in CA doing leverage finance and am thinking about switching to either general corp or EC/VC work. Got few questions...

1. I'm starting to gather from TLS postings that EC/VC work (especially EC) can become very repetitive. How much truth is there to this?

2. What are the usual exit options for those that mostly represent VC? I wouldn't think VC funds would normally have an in-house team due to their lean staffing. How easy/difficult is it to turn to the business side (i majored in finance but never took on a quantitative analysis job)? What are ways that I can prove that I have the quantitative skill set to succeed as a VC associate?

3. What are the usual exit options for general corp at prestige CA office (I'm looking at Mofo, OMM, Sidley, Orrick)

4. Lastly, how is Orrick's transactional practice rated in California? I know they have good IP lit practice but wasn't sure about m&a/ec/vc/tech trans area...

Thanks


Junior associate at one of the major VC/Corporate shops in the Valley here (WSGR/Cooley/Fenwick/Gunderson). You've asked some good questions, but I think you should definitely keep doing your research. I want to steer you in the right direction, so this is going to be SUPER long. Apologies in advance.

The terms you're using for practice areas are a bit vague so I'm going to clarify those. VC (Venture Capital) and EC (Emerging Companies) are generally used interchangeably as a catchall for the whole practice area, which consists of representing venture-backed startups and the investors/VC firms that fund them in both the financing context and in their day-to-day corporate/business matters. People/firms use different words for this ("startup", "technology companies", etc.), but it's all the same shit. I'm going to use "VC work" to refer to the practice area.

VC work itself can be divided into two areas (most people do both, but many do a lot more of one than the other):
- Company-side: For early-stage companies, you're their outside general counsel (even as a junior). You incorporate them, represent them on all day-to-day legal stuff (option grants, etc.), and do their financings (negotiate with the investors on the company's behalf, etc.). The role evolves as they get more mature and hire their own in-house counsel, etc.
- Investor-side: You're mostly doing financings here, representing the VC firms/angels/incubators that invest in the startups.

VC work brushes up against other, related corporate practice areas, mainly:
- M&A: Sell-side (your startup client gets acquired), or buy-side (or your mature client acquires a startup or another mature company)
- Securities: IPOs (your startup client goes public) and general public company work (corporate governance and filings for your startup that went public, like 8-Ks, etc.)

Now that's established, on to your questions:

1. Yes, repetitiveness is a common gripe. The other poster summarized a big part of why this is the case. Financings aren't very complex and the goal is typically to do each one just like the last, marking up the same set of documents as little as possible. There are a few common negotiating points (what investment $ threshold gets an investor pro rata rights for the next round, who gets a board seat, observer rights, etc.), but it doesn't take long to have seen most of it.

Whether you like VC work is very individualized. There are people in my firm who love VC work and do nothing but rep startups and there are people who hate VC work and will only do M&A, but I find that the vast majority fall somewhere in between. I think people who enjoy it like the relationship-building aspect of it, find fulfillment in "taking the journey" with their companies (incorporation to IPO or M&A exit), and don't mind that they aren't analyzing the cutting edge of the law in complex and novel ways. You get immediate and meaningful "client contact" and will be on the phone/emailing with CEOs and GCs from day one. Whether you find that appealing is up to you.


2. I agree with the other junior associate poster that company-side work generally sets you up better for exit options (mainly going in-house to clients/tech companies). VC funds often do have legal teams, but I think they're typically very lean (GC only or GC + assistant GC). I've seen a few people at my firm leave for assistant GC positions at VC firms and incubators, but they're always more senior (5-7+ years) and it's much less common than going in-house to a company.

As for going to the business side of a VC firm, that is super rare and I don't think you should count on it unless you have some really desirable business experience (which it sounds like you don't). I think a more realistic way to get into a business role is to be the first lawyer in at startup (where you'll have a quasi-business/legal role by virtue of the small size of your company), make them give you business-sounding title (like GC & COO, etc.), then make a second jump to a pure business role down the road (either within your company or at a new one). that's still super rare though so don't count on that either.

3. This depends on what you mean by "exit options." But first, that's a really random list of firms - where did you come up with these? None of those firms are known for their corporate work in CA (except maybe MoFo a little, but they still aren't top tier for corporate). For VC work in the Bay Area, the pecking order is something like: WSGR/Fenwick/Cooley/Gunderson (peers) >> Goodwin >> Orrick/Latham. You should check out Chambers to get a better sense of who the CA corporate players are in a broader sense (it's pretty accurate).

If by exit options you mean leaving your biglaw firm for a legal role somewhere other than another biglaw firm - then exit options are pretty good from the VC-focused firms (I agree with other junior associate poster's description). If you mean exiting to a non-legal job, this is entirely case-by-case, but I would think it's generally rough.

4. I agree with the other poster re Orrick. They are decent with early stage companies but they don't have much else in the way of a corporate group (no solid M&A practice, etc.). Like the other poster said, the other firms (mine included) tend to swoop Orrick's startup clients the minute they get mature enough to start thinking about an M&A exit or IPO (and even earlier than that).

To answer your last question about a practice with both startups and mature companies, I would look at WSGR, Fenwick, Cooley, and to a lesser extent, Latham (they're light on the startup side) and maybe Goodwin (light on the mature company side). Gunderson is very startup and VC-heavy and doesn't have much of an M&A or public company practice, so they're better if you're all-in on VC work.

For LA, I would check out Cooley (they have a "Silicon Beach" office in Santa Monica). Not much VC work in LA in general though...

Hope that helps. Let me know if you have any more questions. Good luck!



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