Venture Capital GC taking questions. Left biglaw after 2 years. Forum

[Anonymous User]

I used TLS a lot throughout my law school career for legal employment info and thought I'd give back. I spent 2 years at PEMA-focused V10 law firms before joining a startup and subsequently parachuting out to a sizeable early-stage venture fund where I worked my way up to GC in 3 years as the only attorney. I'd be the equivalent of a 6th year right now if I stayed in biglaw.

Shoot if you have any questions. Will try to answer everyone but no promises.

[Anonymous User]

What's your compensation look like? Are you in a major market? Do you get resources for outside counsel?

[Anonymous User]

What's your compensation look like? Are you in a major market? Do you get resources for outside counsel?

What's your compensation look like? Are you in a major market? Do you get resources for outside counsel?

OP here.

Re: Compensation. My compensation is between $350K-$450K cash in any given year but I'm paid on the lower end of the spectrum given years of experience and the fact that had zero venture capital experience walking through the door (i.e., they got me at a discount). I started as corporate counsel (even though I was the only attorney in house). Since making GC, my cash comp has been getting bumped up quite a bit on an annual basis. At maturity, I would expect cash + bonus to be around $750k to $1M. I get single digit % points on carried interest at the fund so there will be more money after a few years. Typically, GCs will make between $750K and $2.5M cash + bonus (highly dependent on the AUM at the fund). As a caveat, I don't manage our fund formation process or investor relations at this point so that probably makes a large difference too.

Re: Location. Major market but secondary market for venture. To be fair, I only consider SF/NYC to be "major" in VC.

Re: Outside Counsel. I don't need outside counsel for much but yes, we use outside counsel for new deals and for ad hoc projects. Follow-on investments, we lead in-house. This is mainly because we invest in early stage companies. For those VC funds who do later-stage investments, it is much more PE-like.

[Anonymous User]

Thanks VERY MUCH, OP!

What does your day-to-day look like?

What documents/agreements typically fall on your plate?

What advice do you have for outside counsel?

[1styearlateral]

If you're not working on any fund matters (formation, reporting, compliance, etc.), what else could you possibly be doing at a VC fund besides sending out and marking up NDAs? What are we missing here?

[Anonymous User]

Given you're what a 5th/6th year level (2 years of BigLaw, 3 years at a startup where I presume you weren't working with many other lawyers, if any), you sound pretty inexperienced for this role.

Not meant as an insult, just an objective description of how many reps you have, docs you've seen, times you've issue-spotted something, etc

Do you rely on outside counsel a ton? What do you do when -- like, this must come up fairly often -- you just don't know the answer to something / if the terms you're getting are market / etc?

Or do you just ... not do that much that's very sophisticated? (Again, not a criticism -- if you're getting paid high 6 figures to chill more power to you)

[Anonymous User]

Given you're what a 5th/6th year level (2 years of BigLaw, 3 years at a startup where I presume you weren't working with many other lawyers, if any), you sound pretty inexperienced for this role.

Not meant as an insult, just an objective description of how many reps you have, docs you've seen, times you've issue-spotted something, etc

Do you rely on outside counsel a ton? What do you do when -- like, this must come up fairly often -- you just don't know the answer to something / if the terms you're getting are market / etc?

Or do you just ... not do that much that's very sophisticated? (Again, not a criticism -- if you're getting paid high 6 figures to chill more power to you)

How is DLA Piper treating you brother?

[Anonymous User]

Given you're what a 5th/6th year level (2 years of BigLaw, 3 years at a startup where I presume you weren't working with many other lawyers, if any), you sound pretty inexperienced for this role.

Not meant as an insult, just an objective description of how many reps you have, docs you've seen, times you've issue-spotted something, etc

Do you rely on outside counsel a ton? What do you do when -- like, this must come up fairly often -- you just don't know the answer to something / if the terms you're getting are market / etc?

Or do you just ... not do that much that's very sophisticated? (Again, not a criticism -- if you're getting paid high 6 figures to chill more power to you)

How is DLA Piper treating you brother?

is "how do you actually run legal for a VC fund with 2 years of BigLaw experience and 3 years of startup experience" really that strange a question lol

this is coming from a place of curiosity and jealousy -- more power to him/her

[Lawman1865]

Given you're what a 5th/6th year level (2 years of BigLaw, 3 years at a startup where I presume you weren't working with many other lawyers, if any), you sound pretty inexperienced for this role.

Not meant as an insult, just an objective description of how many reps you have, docs you've seen, times you've issue-spotted something, etc

Do you rely on outside counsel a ton? What do you do when -- like, this must come up fairly often -- you just don't know the answer to something / if the terms you're getting are market / etc?

Or do you just ... not do that much that's very sophisticated? (Again, not a criticism -- if you're getting paid high 6 figures to chill more power to you)

How is DLA Piper treating you brother?

is "how do you actually run legal for a VC fund with 2 years of BigLaw experience and 3 years of startup experience" really that strange a question lol

this is coming from a place of curiosity and jealousy -- more power to him/her

I agree that it is not a strange question, and actually something that's interesting (and worth asking for junior associates who are reading this). To build on the question, in addition to the kind of documents you work with, were there specific things at your firm and/or startup that helped you prepare for the kind of work and documentation that you do now?

[Anonymous User]

Given you're what a 5th/6th year level (2 years of BigLaw, 3 years at a startup where I presume you weren't working with many other lawyers, if any), you sound pretty inexperienced for this role.

Not meant as an insult, just an objective description of how many reps you have, docs you've seen, times you've issue-spotted something, etc

Do you rely on outside counsel a ton? What do you do when -- like, this must come up fairly often -- you just don't know the answer to something / if the terms you're getting are market / etc?

Or do you just ... not do that much that's very sophisticated? (Again, not a criticism -- if you're getting paid high 6 figures to chill more power to you)

How is DLA Piper treating you brother?

is "how do you actually run legal for a VC fund with 2 years of BigLaw experience and 3 years of startup experience" really that strange a question lol

this is coming from a place of curiosity and jealousy -- more power to him/her

I agree that it is not a strange question, and actually something that's interesting (and worth asking for junior associates who are reading this). To build on the question, in addition to the kind of documents you work with, were there specific things at your firm and/or startup that helped you prepare for the kind of work and documentation that you do now?

Not OP, but I do a lot of VC work in-house now. If you have never looked at the NVCA docs, they are pretty simple and they're generally the basis for most VC deals. If OP has been doing it for a few years, he probably has a solid grasp of that part, particularly since they said they don't handle the fund formation docs.

[Anonymous User]

-

[Anonymous User]

Given you're what a 5th/6th year level (2 years of BigLaw, 3 years at a startup where I presume you weren't working with many other lawyers, if any), you sound pretty inexperienced for this role.

Not meant as an insult, just an objective description of how many reps you have, docs you've seen, times you've issue-spotted something, etc

Do you rely on outside counsel a ton? What do you do when -- like, this must come up fairly often -- you just don't know the answer to something / if the terms you're getting are market / etc?

Or do you just ... not do that much that's very sophisticated? (Again, not a criticism -- if you're getting paid high 6 figures to chill more power to you)

How is DLA Piper treating you brother?

is "how do you actually run legal for a VC fund with 2 years of BigLaw experience and 3 years of startup experience" really that strange a question lol

this is coming from a place of curiosity and jealousy -- more power to him/her

I agree that it is not a strange question, and actually something that's interesting (and worth asking for junior associates who are reading this). To build on the question, in addition to the kind of documents you work with, were there specific things at your firm and/or startup that helped you prepare for the kind of work and documentation that you do now?

OP Here.

Gotta stop thinking like lawyers. The idea that you need a lot of experience to do legal in a VC fund is big scary thing that law firms and certain lawyers tell you because they are too afraid to take a risk and feel like they MUST have certain experience before jumping in. Maybe that's true for PE, a bank or a big corporation but VC simply isn't that difficult. You have 2nd-year EGC/VC attorneys running full transactions even in law firms. You can always call outside counsel for the difficult stuff. The trick is to foster personal relationships with your outside counsel so you can call them for off-the-cuff/free advice on more complicated matters. I play golf with these guys, go to BBQs at their house, grab lunch with them regularly and just shoot the shit.

In my experience, business people dgaf how long you've been at a law firm if you take the work off their plate so they don't have to think about it but are smart enough to understand when you don't have expertise and can get advice cheaply (or free). I'll make this clear - no one gives an f about legal except for lawyers. In fact, not only do they give zero fs, they hate talking about it, dealing with it or even being around it. Lawyers are effectively paid to read shit that no one else wants to read. Once you work in a V5/V10 (or similar subject-matter law firm like Cooley, Gunderson, etc.), have semi-relatable experience in a prestigious place and a good school on your background - you simply get the benefit of the doubt (the same way founders get it from VCs with a Stanford degree and tangential experience in the field at a FANG company). They trust that you'll handle shit and, if you don't, well, you get fired.

Additionally, there's a misconception that VC funds are giant institutions like Blackrock. That's not true. A fund with $5B AUM may only have 30-40 employees including admin. It's more important to be scrappy and ready to jump on any grenade (even if it isn't legal) than it is to have deep subject matter expertise. You can't easily buy dependable problem-solvers, but you can very easily buy expertise.

VC funds are more like startups than banks or big corporations so they tend to look for people that are adaptable and quick on their feet vs. super lawyers that argue over tiny details (business people hate this). This is the same reason a lot of funds hate working with the NYC offices of your typical VC law firms - they hired a bunch of Cravath, Skadden and K&E M&A attorneys during covid to do VC work and those new hires tend to jam up all the deals on shit that doesn't matter.

In early-stage investing, you use industry-standard, open-source docs (NVCA) that go through a new round of comments every financing round from new investors so the legal risk is generally pretty low if you hit all the big points on the first go. If the portfolio company can't raise another round after you fund (in early stage), they're dead anyways. It's more important to execute quickly and efficiently without pissing either the partners or the founders off than be perfect since the same docs will get revised again in the next round. VC funds effectively sell money to founders and money is fungible + there's a lot of dry powder out there for good founders. EQ is very important.

When I started here there were no lawyers and I was hired as corporate counsel. I just pitched myself to the partnership here like a startup founder would pitch themselves. I told them straight up that I didn't have any venture experience but that I would either figure it out or die trying. I got the job in a bake-off against people that were more experienced than I was and eventually was promoted to GC after they saw that I could do the job. They probably paid me half of what they had to pay an experienced person for the first 1.5 years so the risk for them was low since they were literally having investment analysts doing the legal issue spotting before me. I worked big law hours for the first 6 months until I got on my feet. I took lower pay than my startup legal job to get the name on my resume and for the opportunity to ratchet up knowing full well the difference in salary was the same as basically paying tuition at VC university. While there was a risk they would let me go, I could always get another job with their name on my resume and prior pedigree. It's super easy to get a job as a lawyer with pedigree, in house experience and the ability to hold a conversation.

Re: Types of Work. I form the SPVs, deal with a lot of board issues where partners just need a sounding board / sparring partner, manage ongoing litigation with outside counsel, draft term sheets, and run all the financing transactions including all of the follow-on transactions in-house and any secondaries we may have with third parties. For follow-ons, I own the transactions from term sheet to close. In addition, there are non-stop ad hoc projects - from handling immigration work for new employees, to events agreements / commercial contracts and debt financing matters. Other standard stuff: knowledge management, process development, etc. etc.

In addition to those things, you just become an advisor to the partners. As you can imagine, many VC partners are risk takers and they tend to like to bounce ideas on structure, deals, etc. with someone who thinks differently.

As far as issue spotting, etc. VC transactions are done with open-source NVCA docs (which someone else mentioned). The issues are the same almost every time. When I started here, I leveraged contacts heavily and started a "bible" since we hire outside counsel for the initial financing transaction (even though we process follow-on investments and new rounds in existing portfolio companies in-house). I forced all of my lawyers to draft issues lists (vs having rambling calls) and asked them questions in writing while collecting the answers. Given the limited realm of negotiation points and the data collected, it only took 2 months before I was about 80-90% competent on the transaction side. Now I have a compendium of terms from all the major law firms and positions/explanations on pretty much every negotiable point in the NVCA docs. At this point I have probably 100+ transactions under my belt (not including the reps I've gotten on the board management side, etc.).

Re: Prior Experience. I was at a start-up that grew very quickly (60 >> 500 people when I left) where I ran the entire legal process for both commercial contracting and corporate development. This was a company in a new field where I literally became an expert just because, in many situations, I was the only person that had done a transaction of a certain type in that field. Similar situation there - I was the first lawyer and I built out the legal function there and figured out all these "novel" issues. I say "novel" because it's just doing something other people haven't done before using parallels from situations that people have dealt with before. Not rocket science. Over time I've realized that everyone's just figuring shit out, even senior partners. You just kind of learn to figure shit out when you're thrust into a situation and you have to execute / believe in your ability to fix problems.

[Anonymous User]

Thanks VERY MUCH, OP!

What does your day-to-day look like?

What documents/agreements typically fall on your plate?

What advice do you have for outside counsel?

OP Here.

What does your day-to-day look like?
25% of my time is spent dealing with founder/board craziness. Usually some shit blows up at a portfolio company and I get a call in the morning or late at night. Lots of founders doing stuff with their cap table (trying to be sneaky). I get a non-stop stream of consents that I need to make sense of for the partners because investors hate reading that shit. Other times, I have calls from investment partners about fire drill stuff (i.e., one founder hates the other founder and wants to oust him or how to block a transaction they don't like, etc.) - then I have to figure out how to deal with it or structure around it. Sometimes that involves texting the law firm partners that I'm tight with or soliciting advice from other VCGCs.

25% of my time is spent on new transactions. I created form documents over time, so I review the lawyers' comments and redline them against the forms. Figure out what's missing and review their edits to see if they make logical sense. Then I send them a list of questions which they answer and I make legal decisions based on those answers. I always ask them why they made the edit, if it is market and what the benefit is to us over other options. Those answers are cataloged in my records for a future situation. I only reach out to the partner if I get to a negotiation impasse during the transaction, otherwise, if I can negotiate a better point for us, I do it. This also includes making sure we have everything we need to wire, checking the pro forma, etc.

15% of my time is spent thinking through random transactions the partners want to do and sourcing experts/vendors. Whether it's a new SPV, a secondary or some weird tax crap, I need to figure out who to call, what questions to ask and how to process it with very little input from them until I have it fully baked. This could include anything from Cayman vehicles to dealing with venture scout compensation, etc.

15% of my time is spent on follow on transactions where a new investor comes in or we're writing another check.

10% of my time is spent on knowledge management. Making sure that we have all of our docs etc and producing guides for partners on discrete situations.

10% of my time is spent on fund legal stuff. Commercial contracts, employment, etc.

What documents/agreements typically fall on your plate?

Financings: Financing documents (NVCA), term sheets, convertible notes, SAFEs, warrants, etc.

Company Stuff: Anything our fund or board member has to approve at the company level including debt facilities, option grants, strategic partnerships, M&A agreements, etc.

Fund Stuff: SPV docs, LP side letters, really boring compliance stuff, commercial contracts, employment stuff, etc.

What advice do you have for outside counsel?

Best advice is to present solutions with any problems and have a point of view on those solutions. Super annoying to (a) have no solutions presented or (b) 3 options presented to me by someone that doesn't take a position on it. The best lawyers I use give objective advice but have a point of view on the best way forward. The worst lawyers just list off all potential risks and do not give an opinion.

Describe why something is actually an issue - not from a legal perspective but how it can impact the business. Everything is a legal risk but, lawyers get paid $1000/hour to tell us why it is material for someone like us. If it is a big deal, I will think about it and present my opinion of that analysis to the partnership for them to make a business call. I found that crappy lawyers bring up a shit load of points on the issues list and when I ask them why it's material, the answer is, to a certain extent, "if five or ten extremely unlikely things occur, then there's an outside corner case that this problem may be an issue." Better lawyers will list those things too but the issues list will be in order of priority and they'll call out issues that likely not material.

[tamwafle]

Is it plausible for a lender-side fund finance attorney to land an in house role at a fund?

[Anonymous User]

Appreciate the post. I learned a good amount.

[Anonymous User]

How did you get connected to this role? And were there other roles you were looking at for making the next jump? I also left biglaw after about 2 years to join a startup. I'll probably stay here for a couple years, but have been thinking about what a next move looks like. I honestly have no idea whether I'd want to jump to another startup, join a bigger company, or try to do something like this. Would love to hear what else you were thinking about or have seen others do.

As a side note, I do find it pretty funny that people think a significant % of business people (i) view legal work as anything other than a massive nuisance and (ii) are even remotely equipped to tell the difference in quality between whatever 2 vs. 4-5 years of biglaw experience gets you. This whole experience discussion is particularly funny given the current state of biglaw. I was one of them and have been across people in the same boat, so I know for a fact there have been 2nd years at V10s in M&A and cap markets basically running deals with woefully insufficient oversight over the last couple of years.

[Idontwanttomakeaname]

OP would you dm me?

[Anonymous User]

Is it plausible for a lender-side fund finance attorney to land an in house role at a fund?

OP Here.

Generally speaking, VC legal jobs are pretty rare so it's hard to aim for it. If you want to get yourself ready for a potential opportunity, you'll probably need a transition job and a plausible narrative.

They'll look at you the same way they look at a founder. While not true in every circumstance, these funds tend to back (a)(i) Stanford/Wharton/HBS/etc. grads (ii) with first-hand experience in the same field as the proposed idea gained while working at FANG/MBB/top industry-specific company (iii) that are referred by people they know and/or trust; (b) the engineer/technical equivalent of (a)(i)-(iii)); OR (c) people that have done the thing before (e.g., second-time founders or people that have built a similar product at companies listed in (a)(ii)).

Barring some extraordinary circumstance, you're pretty much in the same boat as a founder except replace (a)(i) with T14 law schools (preferably a school with lay prestige) and replace (a)(ii) with a top law firm + maybe some hot start-up in house gig.

This whole industry is a giant networking exercise but you need to be "this tall to enter" (i.e., have the right pedigree).

[Anonymous User]

Dude you are fucking awesome. Love this post.

On comp - how did you negotiate carry and when did you start getting it?

[Anonymous User]

Dude you are fucking awesome. Love this post.

On comp - how did you negotiate carry and when did you start getting it?

OP Here.

I wasn't able to negotiate carry coming in given my lack of experience but made it clear that's what I was there for. They gave me my first taster a few months into the job after they saw that I could handle the gig. Since then, I've been getting single-digit percentage points with every new fund.

[Kafka Esquire]

What a great thread. I was just terminated after finishing my first year in capital markets at a high-deal flow boutique (not biglaw). I have an interview this week with a VC fund and am doing my homework.

[Anonymous User]

OP, if you're still around, any sense of how you'd go about breaking into a VC investment team out of law school?