The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.
Nate Gallon has spent his entire legal career in Silicon Valley working within the technology community, representing entrepreneurs, startups, emerging growth companies, major corporations, and the entire ecosystem of the investor community that funds and supports these innovators. He counsels his clients on corporate and securities law and also acts more generally as a trusted business advisor in connection with a wide range of transactions that technology companies typically undertake throughout their life cycle—entity formation, debt and equity financings, recapitalizations, joint ventures, spin-offs, and growth stage through to a liquidity event. Nate has represented hundreds of start-ups and entrepreneurs in connection with equity financings and general corporate matters, worked on numerous M&A transactions (including buy- and sell-side mergers, asset sales, and stock purchase transactions), joint ventures, and advised a number of public company clients on corporate finance and capital raising transactions. The Legal 500 recognizes Nate as a leading lawyer in the venture capital, emerging companies, and fintech arenas.
Describe your practice area and what it entails.
My practice has two main components. One is representing startups, entrepreneurs, and emerging companies. We form them, grow them, and help them secure equity and debt financing. We help them with their legal issues. We help them scale and grow their business with the goal that the companies will ultimately either be acquired or go public and become an independent public company. I also represent the sources of capital that fund these companies, such as venture funds, sovereign wealth funds, strategic investors, and the whole ecosystem that is the fuel that helps founders grow their companies. The other part of my practice focuses on helping larger technology companies acquire venture-backed and smaller technology businesses both in the U.S. and abroad.
What types of clients do you represent?
One client of mine is a classic example—it’s called Evinced and it's a SAS-based company that I have represented since inception. I helped them with their initial capital raise and formation in 2018. I also helped them with successive rounds of financing as they’ve grown, which includes, for example, negotiating commercial agreements, forming subsidiaries, and helping them with their employee hires. Most recently, they completed a Series B round. At some point, I expect that Evinced will either go public or get acquired. That is what we mean by the “life cycle”—representing a company from its “birth” through to a liquidity event.
What types of deals do you work on?
I mentioned my startup client Evinced and the representative deals I do for them and clients like them. Venture fund examples would include working with Norwest Venture Partners on its investments in InfluxData, Productiv, and Loftium, as well as Santander InnoVentures (n/k/a Mouro Capital) on its equity investments in Upgrade, Creditas, Blueprint, DriveWealth, and Tradeshift. In terms of helping large companies acquire smaller technology businesses, a pair of good representative examples would be advising Ford Motor Company on its acquisitions of Chariot Transit, Inc., and Autonomic, Inc.; and Meta Platforms (formerly Facebook) on its $5.7 billion investment for a 9.99% equity stake in Jio Platforms in India.
How did you choose this practice area?
I knew I wanted to work with startups and knew I wanted to be part of the technology ecosystem. This was back in the ‘90s. I went to law school on the East Coast, but because I had summered with a firm on the West Coast, by my third year in law school I was set on coming out to Silicon Valley to practice law in the tech space.
What is a typical day like?
There is always some combination of calls, drafting, engaging with associates, negotiation with opposing counsel, and administrative responsibilities. As a partner, I have another overlay: business development—reaching out to my contacts, staying close to them, arranging meetings with them, coming up with events or other ways to get in front of new contacts and create new business opportunities, and generally thinking about where we can leverage our strengths to bring in more revenue for the firm. Over the course of a week, it’s a nice mix.
What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?
Law school doesn't teach how to be corporate lawyer. It mostly teaches how to be a litigator. Anything you do in corporate law, generally, you have to seek out and learn on your own, through your firm's training efforts, or on deals directly from more senior attorneys. That said, securities law is fundamental for corporate lawyers, so taking that in law school will make your transition to practice easier. And while not essential, U.S. and international tax could be helpful.
Some law schools now bring in practitioners to teach courses on venture capital, for instance. Twenty to twenty-five years ago, that did not exist. Today, there are more opportunities for people in law school to get a taste of what it's like to be a Silicon Valley or startup lawyer. If you are at a school where that's possible, I would definitely take advantage of the opportunity. Learning from practitioners is the best way to get a sense of what it means to roll up your sleeves and practice this type of law.
In terms of skill sets, the number one skill—and it's an underrated one—is the ability to listen, especially when you're negotiating or debating with someone. Actually listen to them, because a lot of times the tendency—not just in law but in general—is not to listen to what the other person is saying and simply talk over them (or past them and not address what they are saying). That's an important thing because often what you think your response is going to be may change if you actually take a moment—you don't need to respond immediately. With clients, it's equally important to listen and really try to understand what they are saying and what they want. Especially in the startup ecosystem, a client may not necessarily know what they're asking for. They may be an engineer or a scientist, for example, not a lawyer. You have to really pay attention to what they're actually looking for in terms of legal solutions and what their goals are, and try to help them craft solutions so they can get to where they want to go.
What do you like best about your practice area?
For me, the attraction of Silicon Valley was to work with companies that, through new technologies, are creating new industries and opening up opportunities. I was drawn to the notion of new markets and new approaches to business versus working with older industries that weren't necessarily innovating. That's what really gets me up in the morning. Every day I find another entrepreneur, another technology that I think is really cool. That's what inspires me and gives me hope that human beings can continue to be creative in the face of whatever happens—whether it's a recession, a war in Europe, or domestic strife. A number of entrepreneurs are trying to make the world better.
What misconceptions exist about your practice area?
The one I hear most consistently is that it’s a “fill-in-the-blank” practice. In other words, that we just take a form document for a venture financing and fill in the blanks and move on to the next one. In fact, the people who consistently excel and have a client following really stay engaged and connected. They understand that you actually need to know what you're drafting. You need to understand the nuances and the subtlety in every deal. There have been straightforward venture transactions, but there has never been a venture transaction that didn’t require some attention to detail. There is a fair amount of subtlety, and it's not just in the technical part. Especially when you're advising boards in tricky situations. Whether it's a pay-to-play or down round, or the company is being sold for less than its liquidation preference, there's a whole host of Delaware case law that you really need to know to be able to advise boards appropriately.
How do you see this practice area evolving in the future?
This type of practice is not going anywhere. There continues to be outsized demand for startup lawyers. And we are increasingly seeing that demand in other jurisdictions; it's not simply a Silicon Valley phenomenon. New York, Austin, Seattle, and other parts of the U.S. hold opportunities to work with emerging companies. I think the greater distribution of the venture business to other geographies will only continue.
What are some typical career paths for lawyers in this practice area?
People typically go in-house, either to large public companies or to startups. The appeal of a startup is being there from the ground up. Later stage startups need in-house counsel, while earlier stage companies may need you in more of a business role, creating a path for pivoting out of law for those who may want that. Going to a venture fund is another option. That’s a well-worn path and one that makes sense because it's well within the parameters of what you would have been doing as a venture lawyer in a law firm. There are so many sources of capital and so many funds being raised all the time that more opportunities pop up for younger lawyers to go in-house, though there's a lot to learn if you’re going to make that jump!