Robert Gunderson: “The legal market has been one of the few market places that still use old standard business concepts”
Probably the most powerful lawyer that nobody has ever heard of, Robert Gunderson, co-founded Gunderson Dettmer twenty years ago. Since, the firm has evolved into a top legal advisor for venture capital and emerging technology companies such as Foursquare, Accel and Andreessen Horowitz, with 200 lawyers and 7 offices across 2 continents.
Leaders League. Gunderson Dettmer advises hundreds of venture capital and thousands of highgrowth companies. What are your routes to success?
Robert Gunderson. The legal market has been one of the few market places that still use old standard business concepts: a very large number of law firms offer duplicable services without being known for any particular skill sets or expertise. But clients’ needs are changing, and the market is becoming really challenging for firms that are not truly differentiated from one another. Think of the decline of department stores in the US or elsewhere: they no longer suit the specific needs of clients. It is the same with generalist firms that cannot meet the needs of clients who allocate the work to different legal specialists. When I started the firm with other partners, we wanted to reflect this market reality. One fundamental thing that I learned in terms of marketing while in my business school was market segmentation and differentiation, and we agreed that the most exciting market segment was emerging growth companies in technologies and life sciences. So that’s how we started and have since remained focused. And we are passionate about advising emerging market pioneers and leaders. It’s just super exciting to meet people every day who come to see us with crazy or less crazy ideas and who want to transform the world. The feeling of being able to make a change, or participating in this process, is extraordinarily terrific.
Leaders League. Can you explain how such a focused firm responds to a changing global marketplace?
R. G. Just as Paris is the hub of art, literature and painting, Silicon Valley is a great hub of interesting ideas and technologies. But nowadays the world has become more decentralized, and we see other cities building their own “Silicon Valleys,” or local tech hubs. That’s why we have also opened offices outside of the Valley: in Boston, New York, Beijing… and are looking carefully at other geographies, too. We are in a global market, so we need to be a global brand to support emerging growth companies worldwide.
Leaders League. What is your approach when working with early-stage companies?
R. G. We try to help them achieve their objectives as cost-effectively as possible. Being cost-effective is important to be on board with top start-ups. We believe that it is really beneficial to maximize the number of interesting start-ups by minimizing expenses, rather than maximizing fees and minimizing start-up successes, because the truly interesting and challenging legal work of a company – such as complicated corporate financing, M&A or others – doesn’t happen at its early stage, but down the road of its growth. So from our point of view, we would rather prefer to lower the transaction cost so as to get more companies started than to gain a large sum of money from only a few companies. This is one of the reasons we pioneered the “SAFE investment” (Simple Agreement for Future Equity) term sheet, with a few other market players.
Leaders League. Your firm has advised more venture capital funds than any other firm. What do you think differentiates a great venture capital firm from a good one?
R. G. The greatest venture capital firms are those that do the very best deals on a consistent basis. How? Because they have great people who partner very successfully with the entrepreneur/ company in a way that adds significant value – from assistance with recruiting the very best talent to advice and counsel on key business decisions.
Leaders League. What are the golden rules for a company to grow at hyper speed, based on your experience with emerging companies?
R. G. Hard one… I think that the companies that grow at “hyper speed” hire great people who have the capability to assist with building the infrastructure necessary to grow or scale at that rate. Great people tend to attract other great people, and so on. These companies avoid major mistakes thanks to great decision-making (including having great board members and advisors), although great companies will, from time to time, make significant mistakes. When they do, their ability to recognize the mistake and recovery quickly is essential.
Leaders League. Beyond advising founders, you are yourself the founder of a leading firm in the venture capital. What would you therefore say are the core values that lead to your firm’s success?
R. G. We have had a Mission Statement from the very beginning. It is composed of two components that can “answer” your question. One element is this: “Our Mission is to provide total client satisfaction by exceeding expectations of value, quality, expertise, responsiveness, innovation and personal service.” The other is: “Our Mission is to be the employer of choice in the emerging growth company legal marketplace.”
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