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Jay is a founding partner of Gunderson Dettmer, a 270-attorney law firm and also founded and currently leads its Boston office with more than 50 attorneys. He specializes in complex private and public capital market transactions, mergers and acquisitions and venture capital and growth equity fund formations. He maintains a broad legal practice including representing life sciences companies (biotechnology, pharmaceuticals, medical devices and services) as well as technology companies in the enterprise software, media, networking and storage industries.
Lindsay Gearheart: I’d like to start off by asking about your background and what led you to the formation of Gunderson Dettmer.
Jay Hachigian: I was born on the East Coast, specifically New Jersey, but over time I made my way to the West Coast. I received my undergraduate degree at the University of California Berkeley, and after that earned my MBA at the Kellogg School at Northwestern. Then I worked in San Francisco for Price Waterhouse and after that went to law school at USC in Southern California. Following law school, I worked in two large firms on both coasts until I became a partner at one of those firms in Palo Alto in 1994.
In September of 1995, five of my partners and I decided to leave our law firm together to form Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, or more commonly known today as simply Gunderson Dettmer. Twenty-four years ago, there were six of us, and today we’re approximately 270 lawyers in nine offices. We have grown tremendously.
LG: What made the six of you decide to take that leap — what was your inspiration?
JH: What inspired us was an idea. At the time, and even today, most every law firm was a full-service law firm, a “jack of all trades” providing a full range of legal services to its clients based on whatever the client needed. Our idea was different. We wanted to focus on a few specific areas of corporate law in which we were experts and build a business with our clients around just those areas. We never set out to create a full-service law firm and to this day we are not a full-service law firm. We set out to create a highly-specialized law firm particularly focused on emerging growth companies and private investment funds that focus on venture capital or growth equity investing. That’s been our model since day one.
LG: Back in 2014, the firm moved its Boston office from Waltham to the Seaport. Can you talk about how you decided to make that change and how moving to the “Innovation District” has impacted the firm?
JH: When I first moved to Boston from Palo Alto in 2000, the office consisted of three people, myself and two fourth-year associates. When we thought about where to locate the office, we simply looked at where our target clients were. At that time — it may be hard to believe now, but back then — virtually every significant venture capital firm was located in Waltham, including Matrix, Highland, Polaris, Charles River, Battery, North Bridge, Greylock, and many others. Roll the clock forward and none of those firms have offices in Waltham. So in 2014, we looked around and saw that our client base had moved, which indicated to us that it was time for us to do the same.
Today we’re over 50 lawyers in the Seaport. It would be hard to overstate the positive impact of that move on our business and growth. Starting with recruiting, we hire law students from prestigious law schools and for the most part, those talented young lawyers want to live in a vibrant, urban environment. The Seaport is becoming the heartbeat of the innovation ecosystem and provides a fantastic opportunity for young lawyers to live and work in an exciting area of the city. There are many other young professionals that work in the Seaport at law firms, accounting firms and consulting firms. In addition, there are venture capital firms and start-up companies in our building and close by. As a result, there is an energy that you can feel on the streets. Many areas of the city get quiet after working hours, but the Seaport, with its shops, gyms, restaurants and nightclubs, remains active. We have a diverse and talented pool of attorneys and that obviously inures to the benefit of the firm and our clients.
Second is on the client side. Both in terms of client contact and client perception, we’re in the middle of a very vibrant innovation district. Last week, by way of example, I was walking to a board meeting for one of my clients. On my way, I ran into a client in the elevator and as I was crossing the Seaport Bridge, I ran into another client. That spontaneous in-person client contact is really important. It’s hard to put a value on it, but when you’re seeing your clients and they see you in the same geography in which they reside, they think of you as an important part of that ecosystem.
We also routinely host client meetings and events at our office. Being so close to the airport makes our office a very convenient location for out-of-town guests. As a result, many of our clients periodically hold company/client board meetings or management team offsites at our office. Having our clients in our offices so frequently really helps to bind our clients to us. It creates deep, personal relationships. As fast and as good as technology is, I don’t think there really is a substitute for an in person interaction.
Don’t get me wrong, Waltham is a wonderful city with lots of new restaurants etc., and I still live out that way. But the world has changed, and we’ve changed with it.
LG: In addition to Boston, Gunderson Dettmer has offices in Silicon Valley and New York. Can you talk about the differences in those geographies with respect to your innovation practice?
JH: I think there are three necessary elements to establish a geography as a true hub of innovation. The first element is the seeds of innovation. Essentially, that’s great ideas to solve important problems. Typically, those ideas come from world-class universities, teaching hospitals, research labs, etc.
Secondly, you need a well-developed and experienced venture capital community. In my mind, the money they offer is the gasoline for the innovation engine. That money can be deployed by experienced investors who are capable of evaluating technology and risk to fuel those great ideas.
The last element that you need to have a truly vibrant innovation hub is an infrastructure that can support all of that. By infrastructure, I’m referring not just to affordable space, but also access to knowledgeable and experienced advisors — lawyers, accountants, consultants and others. You also need a supportive political environment. Rather than focus on the deficiencies of Silicon Valley and New York by comparison, let’s focus on the positive aspects of Boston and the Innovation District.
With regard to the three necessary elements I mentioned, Boston has some of the very best universities, research labs, and teaching hospitals in the world. They produce some of the most exciting ideas and some of the brightest entrepreneurs anywhere. Second, we are lucky to have an experienced and well-developed venture capital/growth equity investment community that has been operating successfully in Boston for many years. Lastly, on the infrastructure side – affordable space, cost of living and the like — I would say that although we have work to do, we are in pretty good shape compared to others. If you think about it, in the greater Boston area we have pharmaceutical companies making important drugs and we have other types of manufacturing taking place. You don’t see that level of integration in other geographies, mostly for cost reasons. We are also lucky to have a welcoming political environment. We have a Governor and Mayor, albeit from different political parties, who work very well together to attract and support business growth and innovation. They understand the tremendous benefits that inure to the residents of Boston and the Innovation District from the creation of very high wage jobs.
Take Gunderson Dettmer for example. We’ve created over 100 high paying jobs in the Seaport, and although that might not seem like a lot, that’s replicated over and over by many other businesses in the city. Our state and local political leaders don’t demonize founders of companies and venture capitalists who produce products and services of tremendous value to all of us. And yes, entrepreneurs and investors happen to make money in the process, but our political leaders understand the benefits to all of us from business growth and they support that growth in Boston. In short, we’re very lucky in Boston to have a balanced combination of all three of the necessary elements of a vibrant innovation hub.
LG: Are there certain sectors of innovation that you focus on more than others in Boston?
JH: Yes, I think there are two ways to think about that question for us. One is industry sectors that we focus on in Boston. The other way to think about it is lines of business in which we’re engaged.
Taking the first, in terms of industry sectors, I think it’s clear to everyone who visits Boston and the Innovation District that life sciences play a very important role in the ecosystem. That’s everything from therapeutics, diagnostics, medical devices, services and healthcare IT. There’s a fantastic amount of activity around life sciences generally. Beyond that, there’s artificial intelligence, energy — and by energy, I mean battery, nuclear, grid technology, and engineering around how to produce products at scale, such as steel, using less power. We have a fantastic data storage community in the Boston area as well as networking. I would describe Boston and the Innovation District as focused on some of the harder technologies. Of course, we have consumer companies. You can look at Wayfair as a good example, and we have other companies like that, but I would say as a general matter Boston tends to focus on some of the more difficult technologies. At Gunderson Dettmer we obviously focus on those sectors because they’re in our backyard.
The other way to think about it, as I said, is lines of business. One of the businesses on which we focus heavily is the venture capital/growth equity investment community. One-third of every venture capital dollar raised in the world is negotiated by Gunderson Dettmer. That’s a very big deal for us in Boston because we have a very robust venture capital/growth equity practice here. Our premier venture/growth equity fund formation practice in Boston includes clients like Matrix, Spark, Volition, Highland, Polaris, Flare, OpenView, OrbiMed, Longitude Capital, Amplo and many others.
LG: With so many capable law firms in Boston, how do you think about the legal market, and what challenges are you facing now and as you look into the future?
JH: You’re absolutely right. In Boston, we are blessed with many capable full-service law firms, and I really do believe it’s a blessing for us because there are a lot of services provided by those firms upon which companies in Boston depend. Many of those firms have been in Boston for well over 100 years, so they’re very well established with a very strong client base. As I mentioned before, we started our firm 24 years ago with the idea that we would provide a certain set of legal services to a particular client base. We never set out to become a full-service firm and never set out to compete with full-service firms. We are experts at forming, advising and financing emerging growth companies.
As part of this practice, we are excellent at advising companies and venture capital/growth equity firms with respect to liquidity events, so M&A and public offerings. We are also experts at forming and representing venture capital and growth equity firms in connection with the funds that they raise and also the capital that they deploy. We have learned over time that there’s a tremendous flywheel effect between the company work we do and the venture capital/growth equity fund formation and investment work we do. One part of our business supports the other and vice versa. We’ve proven to ourselves over the last 24 years — through the dot com bust of 2000-2001 and the financial collapse of 2008-2009 that our model holds together through not only good times but also really challenging times.
Our challenge in the future is to make sure that we continue to attract very talented lawyers who understand the power and value of our business model. I always tell our associates that in today’s world, you have to be great at something. It doesn’t matter what you’re great at, but if you stick to it, clients will come to appreciate that expertise and will seek you out when they have a matter that needs attention. Our challenge is to stick to the strategy that has served us so well for so long.
I’m not worried about the economy or the market we play in — the innovation marketplace. People have innovated from the beginning of time, and I think they’ll continue to innovate well after we’re gone. It’s really all about the people — hiring, training and mentoring the next generation of talented lawyers to pursue our model successfully well into the future. Boston is evolving rapidly and we are excited to be part of the story being built here.
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