Bill Growney of Goodwin Procter

Bill Growney of Goodwin Procter - Podcast Transcript

Scott Orn:	Welcome to Founders and Friends with Bill Growney from Goodwin Procter. Welcome Bill.
Bill Growney:	Thank you.
Scott Orn:	Great to have you. For those of you who don’t know, Bill is a startup lawyer at a very prestigious firm Goodwin Procter. Bill and I have been friends for a very long time and I even had the opportunity to back Bill’s former employer, [inaudible 00:00:23] when I was at Lighthouse. So I’ve known Bill. I’ve seen him in action. And I know how good he is and that’s why I wanted to have him on the podcast.
Bill Growney:	Well, thanks Scott. Looking forward to dipping down into some of the issues that startups face and obviously thank you for the warm introduction.
Scott Orn:	Yes. The crowd’s going crazy behind me. So how did you get into law? What made you want to become a lawyer? And a startup lawyer.
Bill Growney:	It’s a question I ask myself I think pretty regularly.
Scott Orn:	Laying in bed at night …
Bill Growney:	How did I get here? But so my Dad was an attorney that had a small practice. Solo practitioner effectively and by the time, when I was coming out of college which was a long long time ago, 1992, the economy wasn’t great. I had gotten into Harvard which …
Scott Orn:	Wow. I didn’t know that.
Bill Growney:	Yeah. I’m a pretty smart guy. What can I say? But at the time, it was a good opportunity and I didn’t really know what else to do and there weren’t a lot of other great opportunities out there and so like many people I think at that age they just kind of defaulted in going to law school and …
Scott Orn:	There’s a lot you can do with a legal degree too.
Bill Growney:	Right. I didn’t even really appreciate that at the time. I didn’t even know there was such a thing as corporate law. I just figured everybody went to court and that’s what lawyers do. It was the time LA law was popular during the 80’s.
Scott Orn:	Corbin Bernsen?
Bill Growney:	Yeah. Absolutely. From Major League, one of my all-time favorites. But I learned a lot while I was there about the different opportunities where a guy is going into consulting, a guy is going into ibanking. Gals going into corporate and litigation and what not. And it was about the time too that the Silicon Valley was sort of the internet was sort of booming when you think about …
Scott Orn:	Was this like ’95 when you graduated?
Bill Growney:	I graduated ’95. You think about Netscape and …
Scott Orn:	Hambrecht & Quist took Netscape public in 1995 I believe.
Bill Growney:	So that was sort of the beginning. So I came back to the Silicon Valley which was home from San Francisco and this whole internet explosion sort of occurred and was just IPO, IPO, IPO. You didn’t even really need revenue. You didn’t really need any sort of historical existence to speak of.
Scott Orn:	Good story. It was crazy. So you worked on a bunch of those?
Bill Growney:	I worked on a bunch of those.
Scott Orn:	Where did you start your career?
Bill Growney:	Well, originally, I was hired by Brobeck which was a San Francisco-based firm. They had a Silicon Valley office and then …
Scott Orn:	I said oh gosh because Brobeck unfortunately went bankrupt in the bust because they signed a crazy lease. Any Brobeck alumni out there, we still love you. Don’t sign those big leases.
Bill Growney:	I worked with a bunch of former Brobeck and Gunderson folks now but it was Labor Day weekend where before I was supposed to start as a new first year, half of the Silicon Valley office left and started Gunderson Dettmer.
Scott Orn:	Oh sweet. Okay.
Bill Growney:	So they had all left. A few months before, there have been some folks I think that had left to go to VLG, Venture Law Group but of the folks that remained behind about half of them bolted three weeks before and so …
Scott Orn:	I have a good story about that. Lighthouse Capital, my old employer, there was a guy named Edgy Scott who was ran Imperial Bank’s venture financing arm and Scott Dettmer drove by him on Friday afternoon and Edgy was like cutting the grass or something like that and then he came back maybe Saturday. He drove back around and said, hey Edgie, I’m thinking about making a pretty big change. Is there a way you can help kind of finance something if I start something new? And Edgy’s like, hell yeah. You’re Scott Dettmer. So Edgy worked over the weekend and put together like a million dollar loan for those guys to be able to buy all the office equipment and everything and that’s one of the ways Gunderson was born.
Bill Growney:	That’s the only way they could afford my massive salary at the time. When we got there, there were empty boxes. There was really no computer or if there was, there was no software on it. It was a true startup in every sense of the word and it was fun. It was exciting and I did that for a while.
Scott Orn:	Yeah. That’s a good experience though. And you can relate to your clients. I feel like that’s how we are at Kruze Consulting too. Like we’re a startup too and like believe me, when I see that entrepreneur who’s tired and really freaking exhausted, I’m like, hey, I hear you. I’m right there with you. And Vanessa’s even more extreme like that. So yeah. Do you feel like that? Did you relate to all of them?
Bill Growney:	So yeah for sure and we were a new firm and it was exciting and it was going to be different and all the things. It was going to have a hyper-focus. There was no litigation. I mean there were a lot of things about the model that at the time were appealing that they wouldn’t be distracted by litigation or they wouldn’t be beholden to their litigation partners and therefore if you wanted the best litigator for securities fraud, they could recommend the best rather than the guy next door. And there was something very appealing about that. I’ve come to change my opinion on that subject.
Scott Orn:	We were talking about this weeks ago.
Bill Growney:	Yeah.
Scott Orn:	It’s nice to do a walk down the hall and get like the expert in your own office who know exactly what’s going on.
Bill Growney:	Right. And if it’s [inaudible 00:06:09] the company litigation, you have a responsibility to your client. You’re going to tell them, hey listen, our guy’s really good but here’s who I would recommend. We do that all the time. But to have to go get the guy to do a conflict check and on board a new client just so he can answer a 15-minute call which most of them don’t require but it’s just much better to have.
Scott Orn:	It’s just like also having the learning cycle be tighter and keeping that kind of learning internal. So that the next time you don’t even need to ask the person. You just know the answer.
Bill Growney:	Absolutely. Absolutely. Since I’ve come back to the firm now, there’s been a lot of times where I’ve gone to just get an education. I just did that. One of my partners Grant Fondo is big into digital security, digital currency and he was former Assistant US Attorney and a prosecutor effectively and so he has sort of created this real expertise around digital currency and so I just went and sat down the other day and just said okay, give me the half-hour overview of the types of laws that people can inadvertently violate.
Scott Orn:	Yeah. That’s why having working with the really good Silicon Valley firm is priceless. I mean I have so many entrepreneurs call and they’re just like, yeah I think I got my family lawyer or some guy. We don’t even want to work with you if you’re going to take that route. Things get too screwed up, just do it by the book, work with the best people, it’s totally worth it. I don’t really know if people know this but like a lot of times you guys will do like a small fee deferral or something like that just to like help them get going until they raise money, until they raise more money. It’s not like hugely expensive.
Bill Growney:	Yeah. Absolutely. Well, so there’s a couple of factors. One is that we represent over a thousand technology companies. The entire practice group in the Silicon Valley and in the San Francisco office and really in the Boston office and throughout the firm is focused on these tech startups and you can’t make it uneconomical for them to get legal advice. So we do a couple of things. One, we have discounts and deferrals until financing for clients that we believe ultimately will get financed.
Scott Orn:	It’s a pretty high bar. You can’t just be some dude off the street. You got to have a track record or something interesting. You should clarify that. You’re going to get a lot of calls next week.
Bill Growney:	I’m around. I’ll give you my number. So that’s one thing. And then two, it’s because we do so many of these where some of the work is very templatized, very repeatable where we’re able to keep the cost points low but you raise an excellent point which is that there’s a bunch of things that you can fix if you had your cousin or your bestfriend’s little brothers, girlfriend do your basic formation stuff and there’s stuff that you can’t and you don’t want to mess around with the capitalization of the company or the IP of the company and get any IP lockdown.
Scott Orn:	83(b) filing is so important.
Bill Growney:	Yeah. Absolutely. And these can cause real problems later on either …
Scott Orn:	Craig was actually cleaning up an 83(b) error for one of our new clients coming to us and they came to you guys like two weeks ago and Craig is cleaning it up for them because they forgot to file the 83(b) filing. Maybe tell people real fast what an 83(a) filing is.
Bill Growney:	So an 83(b) filing, it’s a tax election. Normally when you have stock that’s vesting over time, you are deemed to receive that stock as it vests and therefore if the stock appreciates, you can have a tax event. And the tax laws are complicated but you can owe taxes on that and 83(b) election says, I’m going to pay all my taxes on that future appreciation right now in advance and hopefully the cost is zero because the fair market value equals the price that you pay.
Scott Orn:	You’re basically buying them on Day 1.
Bill Growney:	You’re buying them on Day 1 for their fair market value. So there is no tax when you’re doing it. Promise there’s a 30-day ticking clock and there’s not a 31-day ticking clock. It’s like you got to get this filing in and you can try to fix the problem but the only way to do that is to collapse all of the future vesting which is not ideal for investors that are coming in later. And so it can get complicated. But those are the types of things that it’s tough to unring the bell if you screw those up early.
Scott Orn:	I think the other thing is, and we’ve kind of really come to understand this because our clients are telling us this, startup entrepreneurs just need someone to call. They need to be able to pick up the phone and call one person who’s their expert in law or accounting or whatever it is and get the right answer. And that is priceless for them. All these machinations and doing all this stuff is important but just being able to get like a good 20 minutes of counsel is so important. I mean that’s why I recommend people working with you because they can call you and ask the questions they need to ask and it’s super helpful to entrepreneurs.
Bill Growney:	Yeah. And also I mean that also goes to the cost savings. I mean if you ask somebody that does this every day all day, the answer’s going to take ten minutes. It’s going to be given to you on that call or the answer’s going to be like I don’t know but it won’t be, oh yeah let me think about it then go do two hours’ worth of research which you’re paying for and then come back with what should’ve been a ten-minute.
Scott Orn:	It’s crazy. The standardization is really powerful. What was your path to Goodwin? Like you left Gunderson …
Bill Growney:	So I left Gunderson … I mean there was another recession coming on and I was taking stock.
Scott Orn:	Your timing is unbelievable.
Bill Growney:	I was taking stock of what were my prospects as I was sort of getting close to that sort of partnership time and the myth at the time was that if you go in-house, you’re just going to make millions and millions of dollars because the equity is going to be the next Facebook or Google or whatever. And so I got this opportunity to go in-house to a public company. A public company GC which you know is something that people aspire to. Young associates want to be at a public company and sort of running their show and what not. So it was a great opportunity and I took it and went in-house for I think about 15 years or so.
Scott Orn:	I didn’t know that. Wow.
Bill Growney:	Oh yeah.
Scott Orn:	Wow.
Bill Growney:	I took off in 2001 and then just went back sort of last year.
Scott Orn:	Yeah. I still remember our conversation around that because you ended up at imeem for a while and I think one other thing that people underappreciated is having a general counsel who actually is a good business person too is very very valuable. Because you can find people who are just a good lawyer but I think one of your strengths is like you’re actually a really good business person too. And I remember like talking through some of the fundamentals of imeem and I was like, hey we got to really ramp up this … for people who don’t know, imeem was like a music startup that had a massive adoption like way before Spotify. But you still had to pay the piper with the record companies and there had to be a way to monetize enough to be able to pay the record companies. And I remember talking to you and you were like …
Bill Growney:	And it turns out there is not.
Scott Orn:	Record companies are difficult to satisfy.
Bill Growney:	Right.
Scott Orn:	But like I remember talking to you and you’re like, yeah we have to figure some stuff out or else we’re going to be in trouble because we have to be able to monetize to pay these guys and like I don’t think many other general counsels would be focused on that or like thinking about that, right? A lot of them are just kind of knocking stuff out.
Bill Growney:	Well, I will tell you this, a successful general counsel is someone that has to understand the business and whether they start out that way or whether they have to acquire those skills while they’re there and for me it was a combination I think of both but it is important because at the end of the day, you have to make decisions. The thing about being outside counsel is you can oftentimes provide counsel and the better attorneys are the ones that also have a point of view.
Scott Orn:	Yes. I totally agree.
Bill Growney:	You can do X and Y. I would do X for the following reasons unless you can’t get past Z. But when you’re in-house, there’s no like you know, a good attorney’s going to have a point of view. You have to have a point of view because you can’t avoid it. It’s your job.
Scott Orn:	The CEO on board need to know what it is.
Bill Growney:	Sure. The CEO is going to say, what do you suggest that I do? And you can’t say, you can do X or Y. So yeah I think most general counsels and people that thrive at it and enjoy it are the people that also kind of enjoy that business aspect of it.
Scott Orn:	It’s more interesting.
Bill Growney:	Yeah. That said, you can overdo it too. I mean you can get outside your swim lane if you’re not …
Scott Orn:	What’s an example of that? You probably done it before.
Bill Growney:	Oh course. I think everyone has. I mean like I’m the in-house counsel and people bringing by the copy for the advertising materials and really all they want to know is how does the boilerplate at the bottom look and are we okay? Can we say X, Y and Z and instead I’m like, I think a lighter shade of blue would really capture the model’s eyes.
Scott Orn:	You’d watched Mad Men the night before and …
Bill Growney:	And they’re like, thanks. That’s very helpful. We’re going to definitely take that into consideration and of course it looks exactly the same like a week later.
Scott Orn:	I love it. So Goodwin’s one of the top firms in the Valley. We do a ton of work with you guys. Great advisors. What attracted you to them?
Bill Growney:	Two things. One, I used them. So we had originally at my last company RichRelevance, we we’re using different firm. Out of discretion I won’t name them. They were good but the opportunity to work with the folks at Goodwin sort of presented itself and I had always maintained relationship with a lot of the partners there. And so once there was an opportunity to switch, we made the switch and it worked out really great. And then in addition, a lot of my friends from Gunderson Dettmer are now partners there. Anthony McCusker, Craig Schmitz, Jim Riley, David Van Horne, I hope I’m not missing anyone.
Scott Orn:	These are like the who’s who of Silicon Valley lawyers. These are some big time people.
Bill Growney:	Yeah. They are much more successful than I am.
Scott Orn:	It’s only going to take a couple of years to catch up.
Bill Growney:	Yeah. They’re pretty far ahead but they’re great and they’ve been super supportive. In fact, my going to Goodwin in many ways was them pulling as much as me going. I was headed to a different firm to do a different type of practice potentially. Focus more on privacy and intellectual property. Yeah. And these guys were like, what are you doing? Come here. Things are going great. The firm is doing really well. It’s an exciting practice. Et cetera. Et cetera.
Scott Orn:	That’s awesome. It worked and you’re like instantly … I mean you’re already like representing people …
Bill Growney:	I had one client. I had RichRelevance. Which ironically wasn’t even my client. Like I had to go ask the guy that was getting all the credit for it.
Scott Orn:	How did that conversation go?
Bill Growney:	It was hard. Believe me. This guy, he loses clients that big …
Scott Orn:	Was it like how the baseball players that they want to get their old number back? They got to buy a Rolex or something like that for …
Bill Growney:	That’s right. I couldn’t afford a Rolex. So I gave the guy a nice bottle of wine.
Scott Orn:	So amazing place. In terms of … the people are listening like what are a few tips for startups whether they’re entrepreneur like starting a company right now or maybe they’re series A, series B, what do you tell your clients? What are some of the top things you can recommend or things to not mess up or things that you can really lean into and kick some butt with?
Bill Growney:	Well, so we’ve always got an eye towards ultimate financing or sale of the company where the due diligence from the other side and from the other side’s legal counsel can be pretty robust.
Scott Orn:	How do you make that quick and easy and so there’s nothing that kind of gets unturned?
Bill Growney:	Right. That’s really the trick. I would say a couple of things, the two biggest issues and I eluded to this before are the cap table and intellectual property. Locking down the IP. I mean the number of times that I have seen founders go sideways and maybe they go sideways before they’ve really papered everything and now someone wants to be difficult or just disappears and you can’t track them down and get signatures. It can cause real problems later because no one wants to invest or buy a company where someone can show up the day after and say, yeah 40% of that company is mine. And you need to pay me for my portion as well.
Scott Orn:	This just happened with that Drive Company that got bought by GM for like a billion dollars. Like the co-founder showed up like two weeks after the acquisition and was like, hey, I helped start this company with you and we have a Y Combinator application with both of our names on it with the whole thing here. Like what do you mean I’m not due $200 million?
Bill Growney:	Don’t do that. Avoid that. And it’s so easy for folks to sit on the sidelines for the statute of limitations and then just wait. They have an option effectively. And sort of the same thing with the cap table. A lot of founders, they see Zuckerberg’s got his control super voting a stock and they’re like well, that sounds good and unproblematic. I would like to maintain control.
Scott Orn:	I wonder what investors think about that.
Bill Growney:	Right. Investors, they tend not to like it and so … there’s this school of thought which people can subscribe to. Reasonable people can defer but there’s some folks that will say, listen, if I have to take it out later, I’ll take it out later. The problem is that you lose a little bit of credibility in the process and so you just got to be kind of honest with yourself at the outset. What kind of dues do I have with future investors? Then you can make a more reasonable decision. But you got to be kind of selfaware.
Scott Orn:	Yeah. So locking down the cap table and making sure your IP is papered correctly, all the consulting agreements are signed. No one just forgot to sign something and you don’t have full access to developer’s IP, things like that.
Bill Growney:	Yup. When you come to a firm like Goodwin and there are other firms in the Valley that will do the same. I mean there’s some really good firms. I won’t name any of them but you know who you are. There’ll be a standard package of these documents and one of the things that we all drive home is really every employee needs to sign the proprietary information agreement. Every consultant needs to sign a consulting agreement because you don’t want to have the question come up because even if you can get past it in an investment and let’s face it, if you have one consultant that didn’t sign one agreement you probably might still be able to raise money but you’re going to spend $10,000 of attorney’s time fighting over that issue and what are the consequence to that and should there be an indemnification for that or a carve out or an escrow or whatever. And it’s just not … it’s not worth it. If you just gotten the signature upfront.
Scott Orn:	And you also have like sometimes people freelance or do something on the side and they might be working for a big company and then the big company’s like, we’re not going to sign that.
Bill Growney:	Sure. Absolutely and that happens all the time. Especially for people that are going to start a company. They’re currently employed somewhere else and so that’s where spending a little bit of time with either myself or one of my partners Jim Riley who heads up our intellectual property transactions team is really helpful because they can walk you through how to protect yourself from claims by that large company.
Scott Orn:	Who has a lot of resources.
Bill Growney:	Who has a lot of resources that hey, oh yeah you’re working on that while you are here, well that’s similar to some work that we had been thinking about developing and therefore we own it and you can buy it back from us but you can imagine the parade of horribles.
Scott Orn:	So those are the two big ones. Is there something like Series A, Series B that people need to think about? I mean that’s super valuable. What other things have you seen or other mistakes?
Bill Growney:	Well there’s all the mistakes that I have made myself in the past. But one, Bill Gurley just had that article which I think was both timely and I thought really good in that some people get so invested in their valuation metric that they’ll make a bad deal to protect it and I’ve done that in the past. People do because you always think that it’s just a temporary dip and you’ll bounce right back but in many ways, some of those deals can actually prevent you from recovering later.
Scott Orn:	Yeah. And what you’re kind of talking about … so Bill Gurley’s article, I forgot what the title was but it was something about the unicorns and how they’re going to be in trouble and basically what you’re saying is, there’s a lot of companies that will take a “structured deal” like an equity investment that really acts more like debt. It’s basically everything a debt deal will be except it’s not called debt and basically gives you whatever valuation you want but you got to pay a coupon and they have right of first refusal and if you go public and the valuation’s lower than what they did the deal at, they get to convert at a lower price that makes them whole. Like all these kind of things. Is that covered? Or what other bells and whistles have you seen?
Bill Growney:	Those are some of the big ones. You got the ratchet. You got a 3x senior liquidation preference which basically means like I don’t care whether you value yourself at $20 or $20 billion. If I get all my money back times three off the top, then …
Scott Orn:	I’m happy.
Bill Growney:	Yeah.
Scott Orn:	Yeah.
Bill Growney:	I’m less price sensitive on the valuation because it’s effectively debt.
Scott Orn:	And sometimes those change, those go up depending on how long before your IPO. Box and Square both had things like this in their capital structure. Both are actually really good companies and in fact I bought those post-IPO but the guys who put the last money in got these massive discounts of the IPO price where they were just totally agnostic to what the company went public at. And they made two or three times their money plus they get to hold on to their shares. It’s just a crazy kind of situation.
Bill Growney:	Yeah.
Scott Orn:	So for your late stage, be smart about … what do you say to the founder? You probably had this conversation before. Okay I could take structured term sheet or I could take it down round. Like what are the things they have to worry about if they do it down round?
Bill Growney:	Well, so first of all, existing investors may have anti-dilution protections. So they may have a ratchet would be unusual but it’s becoming more common as people try to hold on to their valuations.
Scott Orn:	So that means like the early investors could basically … they still get to preserve their ownership, right?
Bill Growney:	They get a little adjustment to effectively their number of sharers if they bought at above that price. So they get some price protection and how much price protection they get sort of depends on the flavor of protection that they got. But that’s an issue. Morale is an issue. I mean because if you’re raising money in a down round, that may mean that the common stock also goes down and now you got folks that have options that are out of the money. Are there solutions for that? Some of them can be major. I mean you could do a re-pricing of the stock. You can just goose people up with some additional shares. I mean there’s ways to solve that problem but it’s a real problem. I mean for sure, right?
Scott Orn:	I just talked to a friend this morning whose like, I’m way underwater. I’m looking for a new job.
Bill Growney:	Right.
Scott Orn:	The best people.
Bill Growney:	Unfortunately. People that can afford to leave, leave. So those are some of the issues with going with the down round.
Scott Orn:	But when you do the structured way, it’s a little bit like taking your medicine now or taking your medicine later because you do the structured way makes it really hard to raise another round after that. That structured term sheet better be your last money in.
Bill Growney:	Yeah. Because it makes it more difficult to then just layer more and more preferences on top of that because whatever the next person gets is going to be at least you just set a floor for what the terms are going to be for the next round. Reasonable people can make decisions. It just depends on how expensive is that money at that valuation. And is it worth having a little more dilution because the investor can get the same return either way. They either protect on the down side and they sort of fix their return or they get many more shares and then if it goes up, they can value, the expected can be the same. It just depends on how they sort of structure it.
Scott Orn:	Do you ever see entrepreneurs turning … someone offers them for argument’s sake like a $500 million valuation. They’re like, no I think I’m worth more like $400 million. Let’s do that and then we have some room or is that just like a crazy …
Bill Growney:	Well that’s a successful company. That company is going places because they get it. They know that now a potential exit comes along that last investor is going to be decided to vote for it and not exercise appraisal rights or protective provisions of whatever they can do to make it not happen because they’ve gotten their return and a lot of times when you’re the entrepreneur or company in-house counsel, the investors will tell you, hey this is a good thing for you and it’s a little tough to take them seriously because they have their own interest in keeping the price low. But there is definitely something to be said for that. I would say with respect to the cap table, think ahead. Don’t always just assume everything is up into the right and keep it as simple as possible because it’s going to get more complicated. Cap table’s just going to get more complicated as you bring on more people and they have maybe different vesting or you do one-off grants to people or as you bring on new investors and they have different rights so say with their stocks. So as early as you can make it simple, do so.
Scott Orn:	Stay simple as long as possible.
Bill Growney:	Absolutely.
Scott Orn:	Yeah. That’s good advice. Anything that … what are you seeing on in terms of like employees being able to exercise their options when they leave. I know like Pinterest is doing some cool stuff around keeping them as a consultant so they don’t have to come up with check to exercise their options right away. Or is that like tough to do or …
Bill Growney:	It’s not tough to do. I mean you sit there with a big overhang on your cap table the more you do it. A lot of those companies I believe are a little self-interested. They don’t want to create a secondary market in their stock.
Scott Orn:	Oh is that why they’re doing it?
Bill Growney:	I mean a cynical person would be like, yeah because if I need to write a big check to exercise my options, I need to have a way to fund that.
Scott Orn:	I can’t write a $500,000-check.
Bill Growney:	And I’d like to not take out another mortgage or go borrow from my wife or my kid’s college fund or whatever to exercise options in a startup. So then you look to okay, who will buy these and that can cause problems for companies. So sometimes just to take some of the pressure off, I think that’s part of the reason.
Scott Orn:	Awesome. Dude, this has been really good. Any parting tips besides call Bill Growney at Goodwin Procter?
Bill Growney:	Call Bill Growney at Goodwin Procter even if you just want to hang out and chat but listen, I think lawyers are expensive and a good lawyer will help you manage your own costs because you can find yourself losing clients if you become a real drain on their …
Scott Orn:	And they also know how much money you’ve raised. Like they know what a startup can pay and what they can’t pay. A good one. Someone who’s interested in the long-term.
Bill Growney:	Then what we’ll do is we’ll focus on the two things that are most important initially. The cap table and the intellectual property. And then stuff that can wait while you’re working on the product and marketing and fundraising and all the things that startups need to do. You don’t need to do every potential future legal document right now. You don’t need to put in place a litigation hold policy. I mean these are types of things that you can wait on. Even terms of service or privacy policies, there are things that if you haven’t launched the product yet, hold off on those things and save yourself some of that dough.
Scott Orn:	So find someone who’s reasonable but specializes because then you get the right answer every time without a ton of research or things like that. And then I also think there’s something to be said for you guys are really playing for like the IPO on the late stage rounds and things like that and M&A later. It’s not about maximizing the profit on a Series A fundraise.
Bill Growney:	That’s exactly right. I mean the fact of the matter is just that we want the money when you’re happy to pay it. Litigation maybe the only potential exception to that but otherwise, firms like ours, it’s on when you’re acquiring companies or getting acquired. When you’re doing a huge financing round but that’s where you’re ultimately going to have saved a ton of money in the long run because the worst thing you can end up doing is have something that’s going to shine a bright light on your diligence and give the other side something to sink their teeth into.
Scott Orn:	Yeah. And I’ve seen that like at Lighthouse, we used to uncover like crazy crazy stuff and you’re like, what? Does everyone even know about this? Like half the time only half the board even knows about it. Just weird stuff happening.
Bill Growney:	Yeah. I heard a horror story the other day. A colleague of mine at a different firm was telling me about one of his clients who tried to convert a partnership and just didn’t do it right and meanwhile they’ve raised money and all of that is like poof. Up in the air. Fixing that is a lot harder than getting it right in the first place. Than spending the $5,000 or whatever it takes to get the company formed properly.
Scott Orn:	Can you tell the audience where to find you on the internet?
Bill Growney:	Yeah. So BGrowney@GoodwinProcter.com and that’s Procter with an ER at the end.
Scott Orn:	I always have a hard time spelling it actually. I always want to put an O there.
Bill Growney:	I have to look at my business card just to make sure I got it right. And then the number is 650-752-3203.
Scott Orn:	Awesome. Thanks for coming on. Really appreciate it and you’re an awesome guest. Really appreciate it Bill.
Bill Growney:	Cool. Thanks.
Scott Orn:	Awesome. Take care. Bye.
Bill Growney:	Yeah. Bye.

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