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Scott Orn, CFA

Kathy Woeber Gardner on Startup Legal Tips for Mergers and Acquisitions and Cross Border Transactions

Posted on: 09/08/2016

Kathy Woeber Gardner

Kathy Woeber Gardner

Partner - Montgomery Pacific LLP

Kathy Woeber Gardner of Montgomery Pacific LLP - Podcast Summary

Kathy Woeber Gardner is a Partner at Montgomery Pacific LLP and has spent her career as a lawyer working with startups. Kathy began at Orrick and then moved to Montgomery Pacific. She talks about the transition from big to boutique law firm and building her client base including a special connection with Australian & Asia Pacific Startups. We end with an incredible series of tips for running a startup M&A process.

Kathy Woeber Gardner of Montgomery Pacific LLP - Podcast Transcript

Scott Orn: Welcome to Founders and Friends. It’s Scott Orn here with Kathy Woeber Gardner of Montgomery Pacific Law Group. Welcome Kathy. Kathy
Woeber Gardner:  
Scott Orn: Awesome to have you here. We’re sitting in her palatial law firm offices. Very nice. Kathy
Woeber Gardner:  
Scott Orn: Thank you Scott. And he’s joking about that because we work with startups. That’s awesome. So Kathy and I met probably a couple of months ago and I was just super impressed. She’s a really nice and super smart woman and I thought it’d be awesome to have her on the podcast. So you have kind of an interesting story like you were at a big law firm, really big law firm which you can talk about and then you joined Montgomery Pacific and you basically like got everything kind of on the right track. Like you want to talk about kind of your earlier experience and then how you came over? Kathy
Woeber Gardner: Sure. Like a lot of corporate lawyers, I started out actually at Mayer Brown Chicago so another multi-national law firm and then my family moved to San Francisco and I joined Orrick here in the city and became partner a couple of years later and just love that. But finally, at one point in my life, I was ready to take some time off and we actually were travelling to Korea to adopt our son.
Scott Orn: Oh no way. That’s amazing. Kathy
Woeber Gardner: Yes. So it was time to take a break in the action and I did that for a couple of months and at that point, a great woman named Karen Smith who’s GC of Twilio.
Scott Orn: Oh wow. That’s a great company. Kathy
Woeber Gardner:  
Scott Orn: I’m totally buying their IPL and I don’t know if you noticed this but one of my earlier guest was Brian Mullen who’s the first business hire. Kathy
Woeber Gardner:  
Scott Orn: Yeah. Yes I did see that. Yeah and he’s a super entertaining guy. Great company. Kathy
Woeber Gardner: They’re making headlines when no one else is. So yes. She and our former colleague [inaudible 01:46] are both there and just doing so well. So Karen approached me and said, “Hey why don’t you join me? I just started my own firm.” And Karen had been a partner at Coley and Lexie had been at Coley and I joined them [02:00] and I was moving from being a partner in a multi- national law firm to not taking out the garbage but pretty much doing whatever in terms of a small firm was really an interesting switch.
Scott Orn: Didn’t you like it though? Like I … I mean, before I came over to you, I just sent out two offer letters. Like I typed everything up and Vanessa’s telling me and it’s like that’s life in what we’re doing. Kathy
Woeber Gardner: It is. And because I work with entrepreneurs all the time, it makes sense that I know how to be one too and when I was growing up, my Dad before entrepreneur was a cool word, he told all three of us kids that he hoped we would be entrepreneurs and I said, “Oh no way. I want to be at a big law firm.” And look where I am. Look what I’m doing.
Scott Orn: Yeah. Do you talk about that with your clients? Like look, I empathize because we talk about that a lot because like everything they’re going through, we’re going through the same thing. Kathy
Woeber Gardner: Right and I mean they’ll often start out with you know, I’m financially strapped and we say don’t worry so is every other one of our clients.
Scott Orn: Whenever I get those emails, I’m always like, I totally understand but I’m also like well, let’s figure out how financially strapped you are because we also need to get paid for our work. Kathy
Woeber Gardner:  
Scott Orn: Exactly. Yeah. We do have to get paid. So you came over, you basically just left Orrick and you like jumped feet first. Kathy
Woeber Gardner: Yeah. As I said, I took some time off but it was a matter of months and I jumped to this firm and then I had to start again because even though I had great contacts, the clients I had at Orrick were all Fortune 100 companies and at this firm, I was really focused on working with entrepreneurs. So it took a while.
Scott Orn: How did you build your client base? Because I think there’s A, the entrepreneurs who are listening to this can learn and also it’s helpful for them to know where to find you, you know? How did they network to you or do you network to them? Kathy
Woeber Gardner: Right. Well I used to joke with my partner. My partner’s Karen Masterson Dienst by the way and she’s a former partner at MoFo [04:00] and pretty amazing person. But I used to joke with her. We had this really really bad website and was really embarrassing and but I used to say, “Don’t worry because I don’t want to get a client through our website. I would want to look okay when they check us out.” So that’s a long way of saying, the way clients find us is the old fashion word of mouth and that’s a great thing for us too that they’re coming to us from other clients that we loved and worked with or accountants, law firms.
Scott Orn: They’re pretty qualified too when they come on referral. It’s like you know what kind of person you’re going to be dealing with. Kathy
Woeber Gardner: Yeah and I also … the other sort of old fashion thing I do is actually ask to meet … I usually met every client in person before I start working with them which is a little tough when a lot of our clients are from outside the US but I find that it’s good for them to get to know us and make sure we’re a good fit for them and vice versa.
Scott Orn: We just had a client I’d only dealt with kind of remotely. They’re in Palo Alto. This shows you like the world of remote now. They’re in Palo Alto. We’re in San Francisco. But they finally came to our office after like six months of working together and it was so amazing. It was so much fun and then I could just tell they’re like so much more confident having met us in person and they also just saw we have a nice office and they’re like, oh you’re real human beings. It actually matters. So we try to do that too. Kathy
Woeber Gardner: I know and like I said, it’s hard because so many of our clients come to Silicon Valley from outside the US and the first conversations we’re having with them are Skype and right after I saw you I think, I went to Australia on business and I’d met most of our clients but not all and it was just such a great opportunity to see them where they started and have them show me their cities and it was great.
Scott Orn: That’s always really fun actually when they show you the city. That’s cool. Are you still kind of like you say like your website isn’t that nice or … Kathy
Woeber Gardner:  
Scott Orn: I was going to say, I just looked it and it’s pretty nice. But like how do you … have you evolved on that? Like are you part of like networking events or what do you do? Kathy
Woeber Gardner:  
Scott Orn: Oh no. [06:00] It’s fine now. What do we do? Yeah. Because a lot professionals listen to this actually or service providers to startups right? It’s like … Kathy
Woeber Gardner: Yeah. You know, it’s a combination of things. I mentioned to you that when I first started working with Australian companies and this is now like nine years ago, I got a call from a woman who run something called ANZA Tech Network. Her name is Vicky Forest and she said, “Hey.” She and I had been on like on Board together and she said, I remember that you do a lot of international work. Will you please come speak to all these Aussies?
Scott Orn: Oh that’s awesome. Kathy
Woeber Gardner: And I said, yes I will. However, I have never done a deal in Australia and she’s like, “Oh it’s okay. You can come anyway.” That was the beginning of it and a lot of times, lawyers will moan that they go and they speak somewhere and it’s all for naught but from the very beginning, as I went to these events, it was an awesome way to generate clients.
Scott Orn: That’s amazing. Kathy
Woeber Gardner:  
Scott Orn: Clients I still have. Yeah. When we were talking last, you told me about this like Australian pipeline. It’s kind of like a happy accident, right? Like how did this come along? Kathy
Woeber Gardner: Yes and Australians as a general in proposition are such nice people to work with.
Scott Orn: We have like 4 or 5 that started offshore and come into States. Kathy
Woeber Gardner: I saw you interviewed the gentleman who started 99 Designs and I was in their offices.
Scott Orn: Yeah. Actually the guy I interviewed is like C … I think he’s had a product but he’s in Australia constantly and he actually loves it because he has amazing team members and I think they’re in Melbourne. Kathy
Woeber Gardner: yeah.
Scott Orn: Another friend of mine just took the … I think it might be Head of Product or Head of Marketing at Campaign Monitor which is a really big Australian company too. Kathy
Woeber Gardner:  
Scott Orn: Yes. I actually visited their offices. I mean I didn’t meet him but Yeah. So yeah it’s interesting [08:00] how the cross-realization is starting to happen. Kathy
Woeber Gardner: Exactly and so with the Australians, after I made a few speeches to these groups of tech companies that were coming here kind of checking out the Silicon Valley market, that really started growing on itself. I probably speak to groups of Australian companies several times a year and as I said, I was just there doing the same thing and then of course when you’ve had good success with one company, they’re naturally going to share information about you. And I think with lawyers, lawyers aren’t always people-people. Would that be fair?
Scott Orn: I think the best ones are though. Honestly. Like they have to be able to relate … I’ve worked with tons of lawyers and they have to be able to relate to their clients so they can’t relate, they may technically understand the right kind of path but they may not be able to give good advice. You know? Kathy
Woeber Gardner: Right. And so my partner Karen and I have been very deliberate about the associates we have. Angelique Tremble and Christine Padlan both extremely personable as well as awesome lawyers and I think that matters to clients. That really helps us attract and retain clients. It’s not something you can put on your website.
Scott Orn: Yeah. That makes perfect sense. What’s kind of the quirkiest or a funny thing that’s happened like in an Australian deal like there’s got to be … or maybe you’re dealing with like an Australian to China deal or something like that? Kathy
Woeber Gardner: Well I think, I don’t know if I’d call it quirky but one of our clients who had done a flip-up which I’m happy to explain.
Scott Orn: Actually that would be great. Kathy
Woeber Gardner: They had done a flip-up and became a US parent company and from our perspective seemed to be doing really well here. Got very I don’t know, just frustrated with operating in the US and felt much more comfortable operating in Australia. So they flipped back.
Scott Orn: Oh my gosh. Kathy
Woeber Gardner:  
Scott Orn: Do they have US investors? [10:00] Kathy
Woeber Gardner:  
Scott Orn: Yes. More Australian investors. Usually. Yeah. Kathy
Woeber Gardner: Yes. I haven’t seen that since and I haven’t really seen it when talking about flipping back but you know.
Scott Orn: Maybe you can explain what a flip-up is. I think people will like that. Kathy
Woeber Gardner: Sure. Again, because we work with so many tech and life science companies who are expanding to Silicon Valley from outside the US, they’re typically coming here to get venture money. However, they don’t always know first of all, they’re going to need it or if they can get it. So the way it usually works is and let’s take Australia as an example. An Australian company will have established themselves say in Sidney and be doing quite well and have their own customers and see the US market and be interested in coming here. They’ll come here and they’ll still be not sure if they can really attract the US customers but they’ll have a setup, a wholly owned typically Delaware subsidiary. They’ll do that. They’ll keep testing the market. They’ll enter into contracts. They’ll start getting interest from angels or VC’s. When that happens and its real interest, the angels or the VC’s will say, well look, now it’s time to flip-up to the US which means taking the US subsidiary and making it the US parent and then the Australian company becomes the wholly owned subsidiary and that’s really important because the intellectual property is sitting in Australia as many great people I’m sure too. But the US investors such as angels and VC’s will only invest in a US company and again, it’s got to be Delaware.
Scott Orn: It’s an awesome point. They will only invest in Delaware C Corps and I get probably five calls a day asking that. Can you explain why only Delaware C Corps? Kathy
Woeber Gardner:  
Scott Orn: Yeah. Sure. This is questions I get all the time. Kathy
Woeber Gardner: Yes. Well, it’s funny because when I go and speak and when I was just in [12:00] Australia speaking and I said, “Does everyone know why Delaware and where Delaware is?” And I got a lot of puzzled looks.
Scott Orn: That is funny. Delaware is almost like this virtual state. It’s a virtual corporate state is what it is. Kathy
Woeber Gardner:  
Scott Orn: Of course the people in Delaware will not agree. They’re fine people. Kathy
Woeber Gardner: They’re fine people and it’s actually beautiful state. So Delaware decades ago decided it was going to become the go-to state in all of the US and it is now the place that companies want to go public in which they want to go public. It has the most sophisticated corporate laws in all of US. The best courts. It just is pretty fabulous from a corporate law perspective and so venture capitalists and angels knowing that public companies come out of Delaware want their companies they invest in to be Delaware Corporations.
Scott Orn: Totally. It’s like everyone understands the case law there. So it’s like there’s not going to be crazy surprises or things like that. Kathy
Woeber Gardner: Right. And another thing that surprises our international clients is that as lawyers, we’re very restricted. I’m a California lawyer and so I can advise to California law. But the big exception is that any corporate lawyer in the United States is able to advice as to Delaware corporate law.
Scott Orn: Oh I didn’t know that. Kathy
Woeber Gardner: So you now, if someone came to me and said, “Hey I got this great New York company.” I would send them off to a New York lawyer. But we are all able to do that and that’s why because we all need to.
Scott Orn: Yeah. It’s such a simple thing but people would just mess themselves up incorporating incorrectly and things like that. Well it’s good. So tell me … one thing we’re talking about before we turned the mics on was your MNA practice. We actually do I did MNA. We have companies that get buttons sold all the time. What do you look for in your clients or what type of transactions do you do? Kathy
Woeber Gardner: Well, typically, [14:00] as partners in this firm, my partner and I work with sellers and that’s because they’re often the smaller entity. When we’re both with our big firms, we were representing the big buyers and so that’s the way it was and we also did public company acquisitions which we don’t do here.
Scott Orn: That’s good that you’ve been on the other side and you know what the buyer’s looking for like how important diligence IP. You talked about IP earlier like that’s got to be rock solid or they can’t buy you. Kathy
Woeber Gardner: Yes. Absolutely and one of the things that we see pretty frequently when a seller comes to us is they’ll say, “We’ve got this great buyer and we love them and we’ve actually already signed our term sheet and we’re ready to have you draft the documents.” And we always give them a little bit of a pain look and say, “Wow, is there anything we can do about that?” Because in a perfect world, I know lawyers always think they should be involved at some early stage but I promise you this is absolutely true. A lawyer should be involved at the time of the term sheet.
Scott Orn: Totally. Kathy
Woeber Gardner: And it can save a client so much time and money if we’re involved at that point but most importantly from a seller’s perspective, the seller has all of its leverage at the time prior to signing the term sheet. After the term sheet’s signed, they are … the word’s out on the street.
Scott Orn: Yeah talk about that a little bit because like they presumably have two or three people bidding against for them. Kathy
Woeber Gardner:  
Scott Orn: That would be great if that were always true. Yeah. So they’re like the prettiest belle at the ball and they can demand certain things and once they sign that term sheet, if they have to go back to the other buyers. They’re tainted. Kathy
Woeber Gardner: Well usually they can’t. Usually the buyers have an exclusivity provision in there so they can’t. Often they need to start telling at least some of their employees because they need help getting ready for the acquisition. [16:00] And so as soon as the word gets out, they are off the market and they lose their bargaining opportunity. So the more time that the sellers spends on putting every important aspect of the deal into the term sheet, the much better off the seller is.
Scott Orn: Do you find people who like unintentionally or maybe unaware like agree to like a crazy earn-out structure or something like that and they’re like, “Oh no. I’ll get that money.” But then you know and I know that it’s really hard to collect on that? Maybe talk about earn-out. Kathy
Woeber Gardner: Earn-outs. Right. So in terms of what earn-outs are, they’re usually part of a purchase price. In other words, a buyer will say, “Well seller, you sound amazing and if everything that you said is true about your company which we’ll find out over the next couple of years, we’re happy to spend X-dollars on you but we’re not sure everything you’re saying is true so therefore we’ll pay you Ydollars at the time we close and then over the next two years, we’ll see how the company performs and if it performs the way that you say it’s going to, then you get all the other money and everyone’s happy.”
Scott Orn: Yeah. It sounds super simple. It is kind of alluring. However, the acquirer always starts making changes as soon as they buy you. And oftentimes those changes are kind of implicitly designed for you not to hit your numbers. Kathy
Woeber Gardner:  
Scott Orn: Because they don’t want to pay the extra money. Kathy
Woeber Gardner:  
Scott Orn: That’s right. No. And they have another use for you or they’re not giving you the sales resources or whatever it is. And so it becomes very difficult to hit those numbers. Kathy
Woeber Gardner: Yes absolutely and that’s part of … I think I’ve had times where my clients feel a little impatient with me at the term sheet stage because I’ll say to them, we need to actually drill down at this point and negotiate some certainty around how you’re going to earn the earn-out. Are you on the Board of the company? Do you have a budget committed to your part of the business that you can work against? Do you have staff committed? And at the time, it seems like, [18:00] “Oh, can’t we worry about that until after we close our deal?”
Scott Orn: They’re great people. Kathy
Woeber Gardner: They’re good people and sadly no. I mean it needs to be nailed down including the compensation package of the founders of the company if they’re moving on to work with the buyer. All those things need to be nailed down prior to signing the term sheet because after that, you’ve lost your bargaining power and you then are impacting your ability to actually earn the earn-out that you’re expecting to get because you’re not in control anymore.
Scott Orn: I’ve seen it a lot. So that’s an awesome tip. Like get your lawyer involved super early on the process. I could not agree with that any more. What other things have you seen where you like help your clients glide through the MNA process? Kathy
Woeber Gardner: Sometimes I was just talking to a potential client this morning about an acquisition and they thought they had a buyer lined up and it didn’t work and so now they want to go out to the market and I always have to say, “Look, I’m not best friends with any MNA advisers or investment bankers. I get nothing from their involvement with you but I can’t tell you how many times the right one can really help you ensure that you are working with the right buyer or that you’re getting the best price.” And yes it’s all about relationships but you as the seller need to know what is out there in the market for you before you commit to somebody. And the more buyers you have circling around …
Scott Orn: Totally. Kathy
Woeber Gardner:  
Scott Orn: Yeah. Sometimes I find … I give this advice like on job searches too like don’t just say … don’t get an inbound and say, a proposal and negotiate but then agree to that without running a process and it’s for job searches and for MNA because you don’t know what else is out there and once people kind of know you’re for sale as a company and know how attractive you are [20:00] and kind of can peek on their hood a little bit, you really create a bidding war and I used to work at [inaudible 20:06] like David Gold and Paul Cleveland like the two head of MNA, head of investment banking, those guys, I would watch them drive up the value of a company $100 million or $2 million in an afternoon. And it was like, we used to call David Gold an Obi Wan Kenobi. Like he was amazing, right? But it’s like just the right words, the right kind of leverage points and right communication can really change your outcome. It’s amazing. Kathy
Woeber Gardner: Right. And it’s also important … I was talking to another perspective client. They were actually going to buy out. They were employees of a company and they were going to do a management buyout. Buy out the owners. And I said, do you know the value of the company? Have you had it valued? Well no. We’re not going to do that and again, it’s not a legal point.
Scott Orn: Well that might be legal point for doing a management buyout and you don’t get a fairness or some type of … Kathy
Woeber Gardner:  
Scott Orn: Yeah you’re right but we were so … Earlier. Okay. Kathy
Woeber Gardner: Earlier than that and I was if you are thinking … I mean these people are going to put their life savings on the line. They have to know what the value of the company is. And I’m sure you’re right too. So to me, that’s really …
Scott Orn: I always say that about manage abouts because that’s … manage abouts are having a conflict like the management team’s buying something and the other shareholder’s like, why are you buying this and I’m not? Kathy
Woeber Gardner:  
Scott Orn: But I think your point of like let’s do some research and actually figure out what the market is and do some financial comps, see what things are worth is huge. Like yeah, who would … it would be like marrying the first person who ask you on a date. Kathy
Woeber Gardner:  
Scott Orn: Yeah. This is really good stuff. Like what [22:00] other kind of is it … what about retention? Like that’s always like something … Kathy
Woeber Gardner:  
Scott Orn: Exactly. I think so. Don’t worry baby. I’m not going anywhere. Kathy
Woeber Gardner:  
Scott Orn: I use that whole dating marriage analogy a lot. But it’s so true. It might be even I mean it’s harder to get out of a acquisition than a marriage maybe. I don’t even know. Kathy
Woeber Gardner:  
Scott Orn: And you have to show that they gave them a fair deal. That’s hard. There’s always kind of and a lot of my friends are like they’re VP’s of Sales or VP of Finance. They’re not the CEO. We have obviously a lot of clients who are CEO’s but like what happens to the VP’s in an acquisition? Kathy
Woeber Gardner: Right. So it has to be part of the thinking of the shareholders, the owners of the company who’s ever leading the charge. They have to be convinced that it’s important for those VP’s if they want to stay on and make that part of the acquisition negotiations. Now of course how do you handle that? Because people are free to do whatever they want. People are free to fire. But the way you handle it is to tie it to some monetary reward. You incentivise the people to stay on monetarily or there are certain ways that you can penalize the buyer if they don’t keep them.
Scott Orn: Got it. How do you … Kathy
Woeber Gardner:  
Scott Orn: Assuming all works out. On the front end, like you start a startup and you’re hiring like a VP team. How do you make sure they get taken care of in an acquisition? Kathy
Woeber Gardner: Okay well, there’s a bunch of different ways. So if we’re thinking purely financially, and again I was just having this conversation this morning. You can create something called a management carve out plan in which you ensure certain members of the team that don’t hold stock or not holding that much stock. You will ensure that they get compensated out of the proceeds of the acquisition to keep them in the game and working hard until the minute it closes or even past that.
Scott Orn: That’s a common thing for like companies that have a lot of preference like liquidation preferences. Kathy
Woeber Gardner: That’s true. And then there’s … so you’re right. I’ve seen that mostly with founders who are really deluded and the VC’s want them to stay involved until the deal closes. So [24:00] the other … it’s very similar phantom stock and again the employees are incentivized to stay because there’s a pay-out at the time of the closing.
Scott Orn: What about like acceleration? And like do you give your VP of Sales and VP of Finance acceleration? Or how does that work? Kathy
Woeber Gardner: It’s always a negotiation process. It’s usually for just the C-suite or just below that and there’s no magic way to do it but one way that I’ve seen fairly frequently is that the employee will say, “Look, if I’m going to stay here and work until we close this acquisition, I want to have any shares that aren’t vested. I want 60% of those to be vested to be accelerated by the time we close.” And then I mean of course that person would like them all to be. But the company and the VC’s you know or shareholders will say, “Well no. There has to be a piece of your unvested shares that continue on with the new company.”
Scott Orn: Yeah because the acquirer doesn’t want you to be like calling in rich every day after the acquisition and not come to work. Kathy
Woeber Gardner:  
Scott Orn: Those are like three amazing tips. So how like just on a couple of lighter note, what’s a really kind of have you seen anything crazy in MNA deal you’re working on that you’re like, “Oh my God. I can’t believe.” Or something funny where like the term sheet not getting signed before five o’clock and the deal expiring or something like that? Kathy
Woeber Gardner:  
Scott Orn: Yeah. Yeah. I feel like I’ve seen everything. There’s like twenty to choose from. Kathy
Woeber Gardner: It is twenty to choose from. I did have a client who chose not to hire an investment banker and they were just really convinced about how great the buyer would be and the buyer actually in my … I’m the most cynical person at the table, [26:00] right? I’m the lawyer and the buyer did seem really great. And I was like, you’re right. You made a good decision and after we close the deal, about a month later, the client called me and said, “Is there a lemon law for sales of companies?” And I said no.
Scott Orn: This was the buyer? Kathy
Woeber Gardner:  
Scott Orn: It was the seller. Oh seller. So they got bought by a bad acquirer? Kathy
Woeber Gardner: I wouldn’t say that. I would just say it wasn’t going the way they hoped. Yeah.
Scott Orn: That stinks. Kathy
Woeber Gardner: I know.
Scott Orn: It happens. It’s kind of like a 50-50 thing. Kathy
Woeber Gardner: It is. That’s part of the due diligence and yes the buyer’s doing tons of due diligence on the seller and you don’t think about it so much vice versa except if the seller’s getting buyer stock. But regardless of whether or not you’re getting buyer stock, it’s that whole wedding analogy. You need to know who you’re marrying and you don’t just want to do financial due diligence but you want to understand what their reputation is in the market and how they’ve dealt with other companies they’ve acquired and you can find that out easily.
Scott Orn: I was listening to the Expensify CEO talk and he sold his last company to [inaudible 27:08] and he was used to like most founders like just working 1012 hours a day and just really getting after it and he’s like, two weeks after I got acquired, I looked around and everyone’s leaving like at 4 o’clock and I was like, I feel stupid for working so hard at this big company. So he’s like, I got to do something else. I think there’s just different cultures and there’s people who are builders and people who are caretakers and that’s okay. The big acquirers provide liquidity and keep the cycle going. Kathy
Woeber Gardner: They do. Yeah. And as you know, in California, the one exception to the non-compete, so in California, you cannot tell an employee that once they leave you they can’t compete with you. They can. And that’s rock solid and the exception is that if somebody owns part of a company or all of a company and sells that company, [28:00] they can be bound under the non-compete for a couple of years and that’s always a subject of lots of negotiation and that can be a real challenge for these entrepreneurs to really stick it out under the new parent.
Scott Orn: Yeah because they’re really good in one sector and that’s how they can make a living and they can start another company if they wanted to but they’re stuck. Kathy
Woeber Gardner: Yeah. And to your point with your friend, I mean it’s hard to go from running the show and working 12 hours a day to seeing somebody else like one of my clients who his company was his baby. It was amazing what he did with it and then after he sold it, he saw the parent or the new buyer, the employees’ just wasting money and it was so hard for him to watch that happen.
Scott Orn: I mean there’s a lot of kind of … that can go a lot of different ways but I think there are entrepreneurs that got these big companies and just build a huge division and kick butt. You look at YouTube or WhatsApp or Instagram or like … Kathy
Woeber Gardner:  
Scott Orn: Exactly. And those are like … they give the founders a ton of credit because like they could just call in rich but they’re like, “Hey, I’m building something super important and I’m super motivated.” And kudos to those guys. So if you’re getting bought, be one of those people. Don’t be one of the people who just calls in. Kathy
Woeber Gardner: Exactly. Find a company that you can really thrive in and make it a fascinating next chapter in your career.
Scott Orn: That’s great advice. Just kind of wrapping up here, what’s new like where are you guys going? Where’s Montgomery Pacific going? Kathy
Woeber Gardner: To the moon. Yeah. We’re just thinking about new markets that we can tap into and I’ve spent a lot of time talking about Australia but I didn’t mention that we do quite a bit of work in Asia and China and India and we also have quite a few clients in Europe and one or two in Israel [30:00] and some in Latin America. But we would love to do more work. Right now, we’re thinking the UK and my partner Karen is headed to London in the fall to meet with clients and do more business development there.
Scott Orn: That’s awesome. Kathy
Woeber Gardner:  
Scott Orn: Yeah it seems like most startups start their first international office in London. So it’s a great place to have a practice. Kathy
Woeber Gardner:  
Scott Orn: But … In terms of Europe. Exactly. Yeah for sure. Yeah I guess things are changing now. Maybe a lot of it’s China instead of going to Europe first. Kathy
Woeber Gardner: Yeah. Karen has a lot of … she worked in China and she also works in Japan. So those are interesting markets for us too.
Scott Orn: So international expansion is you’re going to spend a lot of time on planes it sounds like. Kathy
Woeber Gardner: Maybe. Yeah.
Scott Orn: That’s awesome. And then maybe you could tell audience where to find you. Like how do they find Kathy? Kathy
Woeber Gardner: So our name of our firm is Montgomery Pacific. So our website is and we are in the financial district which at some point was really uncool and all our clients move to SOMA and now they’re back. They got pushed out of SOMA.
Scott Orn: We just signed a new lease yesterday. We’re moving to … I love working in the financial district. There’s like a lot energy and it’s easy to get to and everyone can take BART or the bus. It’s really nice actually. Kathy
Woeber Gardner:  
Scott Orn: Are you a member? Kathy
Woeber Gardner:  
Scott Orn: Exactly. Yes. That was great. Well, Kathy Woeber Gardner, thank you very much and it’s Montgomery Pacific Law Group. You gave like five amazing tips. This is maybe the most informative podcast I’ve ever done. So thank you so much and appreciate your time. Thanks. Kathy
Woeber Gardner:  
Scott Orn: My clients keep taking me there which is nice. Yeah. It’s great. So you’re right next to Transamerica building? Kathy
Woeber Gardner:  
Scott Orn: I’m not a member. But I get to go there a fair amount. Vanessa is dying to be a member. We were offered a couple of years ago before it’s like super crazy exclusive and now we can’t get an invite anymore. So story of my life I guess. Kathy
Woeber Gardner:  
Scott Orn: Yeah. And there’s The Battery here which is … Yes. Thank you Scott. Alright. Take care.

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