Emma Raleigh – A Lawyer’s Perspective!
Emma and I met for coffee at The Savoy in The American Bar. Up until now I have interviewed a fair few investors and founders so I was truly excited for the first time to hear the perspective of a lawyer – arguably the most important person round the table on a deal! Emma works at Orrick – one of the best law firms in the VC tech startup space, meaning she benefits from visibility of a huge cross section of deals transacting in the market. The volume of deal flow means she is at the forefront of not just legal trends, but the tech trends too! We talk about the type of deals she is currently working on, founders’ and investors’ blind spots and her top legal tips. A must read 🙂
Current Job Managing Associate at Orrick. I work in the technology companies group.
First Job Legal Officer at the charity which is now known as Breast Cancer Now.
Education Law at the University of Southampton followed by a year abroad at The University of Hong Kong, where I took an LLM course and studied everything from International trade to IP to white-collar crime and realised there was more to law than just property law! I then came back to London to do my legal practice course at BPP Law School.
Favourite book The Decision Book. It has loads of models for strategic thinking. A great reference book for decision-making in both your professional and personal life.
Necessary extravagance Sarah Chapman facial products and her facials!
Female inspiration in business Sheila Henderson – a fantastic business-minded lawyer at Richemont who manages to combine a hectic work schedule, family and training for triathlons whilst always looking effortlessly chic.
Hottest tech startup in the UK right now Tandem…showing banks what it means to be a good bank.
What were your motivations for entering the legal paradigm?
Law gives you insight into a whole range of disciplines and the freedom to develop your interest in almost any area. Plus I love the intellectual challenge of problem solving and working with a huge variety of exciting and disruptive businesses.
Tell us about Orrick and your role there?
Orrick is global international law firm with 1000 lawyers and 25 offices in Asia, Europe and North America, which focuses on serving the technology, energy & infrastructure and finance sectors globally. We are well known as a leading advisor to the global tech sector working with companies through every stage of their growth.
I specialise in US and European tech investments and cross-border M&A transactions. I advise both investors and early stage, high growth companies (with a particular focus on e-commerce, social media and tech) on corporate and commercial issues.
Are there any legal trends coming through from the Valley?
We’re starting to see the re-emergence of participating preferred deals. In a participating preferred deal, an investor gets their money back on the sale of a company and then gets their ownership share of what’s left. From a company perspective, this is often seen as unfair – a reflection of greedy investors – and did disappear for some time. We’ve noticed, however, that it’s now re-emerging to bridge the valuation gap – an investor may think the company is worth X but the founder may have other, grander ideas about its valuation. If it turns out that the company is sold for less than expected, then the participating preferred approach will give the investor a return which is more in line with what their initial valuation was.
What types of deals/clients are you currently working on?
From Orrick’s perspective, there has been no let-up in deal flow since the Brexit vote. Investors are, however, being more conservative in their valuations.
In terms of actual deals we’re seeing a lot of fintech deals and mostly Series A and Series B rounds.
What would you say has been your most exciting or challenging deal?
Working on deals with lawyers on the other side who are not up to scratch is tough. We see a lot of companies retain their early stage lawyers who are not experienced enough to advise on the later stages of a company’s growth. We often end up educating them and doing a lot of the leg work on the legals. In the long run, cheap inexperienced lawyers can be a false saving.
Unfortunately, client confidentiality means I can’t divulge some of the great clients I’m working with right now, but let’s just say that there are some very exciting fintech and recruitment businesses about to make waves in the tech space.
What are founders’ and investors’ blind spots?
How long the deal process takes – whether it’s an investment round or a company sale or purchase. It can often take double the time people expect – particularly for cross border deals. There are many more elements to a deal that people don’t initially factor in – due diligence, regulatory approvals, chasing down shareholders to sign documents, etc.
How should founders of early-stage startups approach template documents and seeking legal advice generally?
- Be mindful about costs and when to draw in expertise. Take advantage of events run by lawyers and ask questions!
- Get recommendations on good and bad lawyers; don’t always think that cheap or expensive is the best. If you are a first time founder you need to have someone who can hold your hand through all the legal documents and the deal process. Don’t be embarrassed about asking questions and ensure you build up a rapport with your lawyer.
- Employ someone with specific expertise – we see people use the most random lawyers! Just because someone sold your house doesn’t mean they’ll know how to sell your business!
- Utilise online document tools where appropriate. Be mindful as to how early stage you are. Some firms do have start up tools whereby you can use ‘off the shelf’ template docs when things are still early and simple – great for template term sheets, employment agreements, etc. As your business grows and things get more complex, you need expertise otherwise people could take advantage and you’ll lose out.
What is the biggest problem that you usually encounter that undermines a deal
Both parties going headstrong into a transaction having not sorted some of the critical deal terms at an early stage and this is when legal costs can ramp up. Term sheets are great for forcing you to focus on the big issues.
You must see a significant number of deals and therefore have a feel for the current trends – what would you see as the current most exciting or disruptive technology
Lots of businesses looking to disrupt regulated industries such as financial services and employment.
Women in Tech
What tips would you share with female founders looking to raise finance?
Agree the term sheet early on, but don’t be too prescriptive – focus on the key deal-breaker points. Also, use your industry contacts – it’s a small world and picking up the phone to get the lowdown on an investor or a lawyer is invaluable.
What advice do you have for women interested in pursuing legal careers in these sectors?
Get practical commercial experience early on and not just legal experience. Businesses need lawyers to provide commercial, solutions-focussed advice – this is an invaluable skill and clients will love you for it so try and get lots of exposure to how businesses work.
What support networks do you lean on?
My colleagues from a day-to-day legal perspective – both in London and globally. Plus friends who work in the tech start-up space – their advice is crucial in terms of understanding how the sector works.