R&G Tech Studio Presents: Venture Capital & Emerging Companies Co-Leader Brad Flint

In this episode of the R&G Tech Studio, venture capital and emerging companies co-lead Brad Flint sits down with technology, media & telecommunications co-lead Ed Black to discuss his practice and to share his thoughts on the evolving tech and regulatory landscape impacting the venture community.

Transcript:

Ed Black: Hi, I’m Ed Black, an attorney at Ropes & Gray, and I’m here to welcome everybody to the latest edition of our R&G Tech Studio podcast series. In this edition, we get the opportunity to talk with my friend and my partner, Brad Flint. Brad is the head of, and a superstar partner, in our venture & emerging companies practice. Brad, it’s great to have you—welcome to the podcast. Now, I’ve got a bunch of questions about the venture & emerging companies work, but before we go there, where are you based, Brad? Are you West Coast? Are you East Coast? Where do you live? What’s life like for you, as a venture attorney?

Brad Flint: I’m based in Boston, where a lot of our VC and EC team sits. But I also spend a lot of time on the West Coast. We have offices in San Francisco, as well as Silicon Valley, and I travel out there quite frequently. We also have a lot of team members in the VC-EC group out there, as well, so I like to try to spend as much time as I can out there, particularly since there's such a tech hub in the Bay Area. It’s always great to meet new clients and existing clients out there a number of times a year.

Ed Black: Do you do work on both coasts?

Brad Flint: Absolutely. We have a great base of clients both in Boston as well as the Valley, and some in New York, Chicago and other cities. We really have a national practice in the EC-VC space, with, of course, concentrations in the geographies where you’d expect the most startups to be, such as the San Francisco area and the Boston area.

Ed Black: With home base being Boston, do you live right in town?

Brad Flint: I’m lucky enough to live right in town. It’s a beautiful walk from my apartment in the South End to the Prudential Tower, where Ropes & Gray is based. I grew up outside of Boston, so it’s also my hometown, I might say, and I certainly have enjoyed living in the city for the past 10 years.

Ed Black: Lovely. It’s a gift to live in a place where you grew up—it’s an absolute gift. Let me shift gears to ask some questions about the VC-emerging companies stuff generally. The first question I just want to be very blunt about: Emerging company–VC work at Ropes & Gray? Isn’t Ropes & Gray some kind of white-shoe institutional law firm—“if you’re not a giant company, don't bother” type of a legal practice?

Brad Flint: It’s a good question, Ed. And, certainly, we are much more than just a white-shoe private equity-focused firm. We’re a very large, global firm and have practices across many different areas. And we have a very healthy practice in the VC-EC space. We represent a large number of emerging companies, as well as many investors that are focused on making investments in those emerging companies—all the way from angel investors, VCs, up to mutual fund investors that might be looking at crossover investments in emerging companies, public companies, strategic investors, as well. So, in addition to working with many emerging companies in tech, life sciences, and other industries, we will frequently work with a number of investors in this space, across the country and across the globe.

Ed Black: Again, I just want to stick with a blunt question here a little bit. When you think about the firms that are famous for venture capital investing—I’m not going to name them, but we all know who they are—they’ll tell you that they have form books that they use to make it easy and efficient to get these startups going. They’ll tell you that they have fee deals, that they have lean and mean staffing, lots of support. Does Ropes & Gray support that kind of practice, which the venture community may see that it needs?

Brad Flint: Absolutely. We have all those same form books. We have all the same methods in place to keep this work very efficient. We certainly understand that cash is very important to emerging company clients, and certainly no more than needed should be spent on lawyers. But at the same time, we do view ourselves as more of a high-touch option when it comes to emerging company and venture capital clients. Although we can keep it very efficient, leveraging things like standard documents, you will be getting partner-level contact—every time, partners will be your primary point of contact. We also have dedicated associate teams, of course, in this space. But in addition to being able to do things efficiently, I think we can efficiently offer that higher-touch service that you might see with some firms that have much, much larger practices in this space.

Ed Black: Let me shift gears a little bit to talk specifically about tech trends in your practice. I know, of course, the VC-EC practice is focused on innovation—and week to week, what’s innovative, what’s new, that’s always changing. But if you had to focus on one, two, maybe three trends you’re seeing in the startup community right now, where are you seeing innovations that are drawing investment dollars, drawing capital, and pushing companies forward?

Brad Flint: Sure—happy to talk a little bit about that, Ed. One certain trend that we see a lot of these days is a move towards more artificial intelligence applications. And that’s both in historical tech, core tech applications of AI, but also in other industries, including life sciences, for example, where companies are now using AI for drug discovery purposes. For example, one client that I work with regularly is Genesis Therapeutics—that’s a company that's developing an AI-based drug discovery platform, which includes artificial neural networks and machine learning models in order to isolate and pinpoint drug candidates for a variety of severe diseases. So, a really interesting intersection between tech and life sciences focused on an application of artificial intelligence in that company. We’re also seeing data monetization being a real trending area, you might say.

Ed Black: Brad, I want to jump in on that first question, that comment on Genesis, and we’ll come back to data monetization in just a second. But one of the things that I read in the paper—I’m not as informed as you are about the venture community, but I see it in the news—is this issue of what they call “convergence.” That is where AI and tech are taking over businesses that used to think of themselves as being not-tech. When you look at the example you just gave, Genesis, here it is, drug discovery—which, go back 15-20 years, was all about either goops or powders that were being manipulated at a bench in the lab—and now it’s computers. Does Ropes have the team that can handle the application of classic electrically engineered technologies in an environment that’s modeled after a pharmaceutical company—a highly regulated industry producing a highly regulated product?

Brad Flint: Absolutely, Ed—yes. Historically, Ropes & Gray has really developed a strong practice in the biotech and broader life sciences space in general, and we’ve always been strong in tech, as well. So, to bring those two industry skillsets together is something that’s pretty easy for us to do with our tight-knit team. We have FDA regulatory lawyers that would work with clients like Genesis. We have IP lawyers that are specialized in thinking through issues, very much emerging issues, about how to protect rights to AI-type applications. We have licensing lawyers that specialize in the convergence of those two spaces. And then our more general teams, including myself, with the experience in both industries and able to speak intelligently as outside general counsel to our emerging company clients, including Genesis, which I had mentioned earlier.

Ed Black: Superb. All right, I cut you off—you were going to say “data monetization,” and I do know that that’s a big trend. I didn't know that it was a key trend for the venture community. So, where do you see data monetization popping up in your practice?

Brad Flint: One area where we’ve seen this pop up is in hospital groups and health systems sitting on huge amounts of data, largely patient data, and knowing that there has to be a way to leverage that data more efficiently in order to drive better patient outcomes. So, certainly very much another example of the convergence of two industries, health care on the one hand and tech on the other hand. A company called ProofSpring is another client of mine that is working with hospitals to use data by applying algorithms and, again, artificial intelligence to a certain extent, to really optimize clinical trials, treatments for patients, etc.—and exploring different ways that that anonymous patient data can be gathered from hospital systems and used to improve outcomes in patients’ lives. That's been a really interesting client of mine, and also brings up a number of unique regulatory and other legal issues that we work with them closely on.

Ed Black: Interesting. When I think of that health care work, again, I think of that big institution, that big hospital, but what you’re seeing is targeted startups that are moving into that space and providing the products and the services that monetize the data?

Brad Flint: Yes, that’s exactly right. And I think one of the other nice things about Ropes & Gray more broadly, and our venture & emerging company practice specifically, is that we are often able to actually help our emerging company clients make those types of connections. Because our practice is so deep across larger industry players, we’re able to introduce our emerging company clients in many cases to hospital contacts, contacts in the biotech industry, investor contacts, etc. And that’s a really nice feature of our practice that you might not see at other law firms as much, I think, and something that we really hope provides a lot of value-add to our clients in the tech space and more broadly.

Ed Black: Superb. All right, as of two years ago, as of six months ago, really maybe nine months ago, digital assets and crypto were “taking over the world.” Of course, we’ve had a market collapse, a crypto winter. How are you seeing it in the venture practice? I had this impression that a year ago, people were clamoring to tokenize early-stage investments, to invest with crypto, get crypto out—and now, less so? How have you seen crypto playing a role in the venture practice?

Brad Flint: There’s still certainly a movement to tokenize investment-type securities. There’s obviously an entire overlay of SEC securities regulation that is at play there, and Ropes spends a lot of time in this space. We definitely want to keep apprised of developments in this regulatory space, and it is, of course, a rapidly developing area. I think in the next couple of years, we’re going to see entirely different sets of regulations that apply to the crypto and blockchain space more broadly. But I am working with one client right now in the intersection of Web3/Metaverse and a tokenization project, where they’re creating a company that is looking to create certain tokens that would represent ownership interests, and then turn around and have that company create assets that would exist within the Metaverse and sell those in the Metaverse—so seeing it on both sides. I would say, as you mentioned, that there is a little bit less of a rush for the venture space more broadly to flip over to tokenization of ownership interests in emerging companies more generally, but that is certainly something that folks are thinking about, and will continue to think about. There’s always going to be a pull towards finding a broader audience of investment, moving away from just the institutional VCs and trying to make venture investments more broadly available to the public, or at least certain areas of the public where folks are more able to make those kind of high-risk investments, and I think that tokenization is certainly one path to doing that.

Ed Black: We’re running out of time. I’ve got a couple quick questions—some of them, I’m going to admit, they’re a little bit silly, but I have one last thing on this tokenization question. So, I think you’re right that the move to digital assets and to tokenized securities unlocks a lot of liquidity. A lot of buyers can now invest who, candidly, didn’t have the right phone numbers, weren't in the right meetings, or were not in to invest earlier. We hear about the “gamification” of investment—do you think that kind of broad-based, dare I say it, “retail-style” of using digital assets to find market liquidity: Do you think that can work? Or do you think it inevitably leads to crazy market swings, and investment apps that are, candidly, video games?

Brad Flint: I do think it can work—I think that regulation has a place in that space. The reason for regulation always is, of course, to protect the interests of the public, and we should be looking out for the interests of the public. For example, it would not be appropriate for someone who is on a relatively low income to be putting their entire life savings into an investment of that nature. But there should be a pathway to enabling an investment of that nature to a certain point within certain demographics that are financially able to take on the risk and have a better chance of understanding the risk. I think once the regulations solidify a bit more in the coming years, that we’ll see real growth, a real explosion of growth in that space, and we will be reaching a much broader audience of potential investment and potential interaction with digital assets.

Ed Black: All right, we have just a minute left. Brad, here we go: Favorite sport or hobby?

Brad Flint: I'd have to say skiing. I grew up outside of Boston, skiing up north in New Hampshire. As soon as my parents could take me out West, I dug my heels right into it and ended up going out and being a ski instructor out West for a couple years after I graduated from college, which is where I met my wife, so the trip had more benefits than just the skiing. It’s certainly something that I still love doing and do whenever I can now.

Ed Black: You and your wife, at one point, were ski professionals?

Brad Flint: That’s right. We were both ski instructors at Vail for a couple of years.

Ed Black: Favorite book? Favorite movie?

Brad Flint: Favorite book or movie, let’s see. So, I love Master and Commander, the Aubrey-Maturin series, which I guess happens to check the box for both book or movie, so there you go.

Ed Black: In that book, do you think you are more like Aubrey, the swashbuckling captain? Or more like Maturin, the curmudgeonly scientist?

Brad Flint: I think it’s definitely got to be Maturin. He’s also a spy, in addition to being curmudgeonly minded, so I guess maybe there’s a little bit of me that “associates with that,” we'll say.

Ed Black: There you go. All right, last question, and I’m stealing this question from an ESPN interview: Which is more important in a peanut butter and jelly sandwich, the peanut butter or the jelly, and why?

Brad Flint: That is a good question. I’d have to say it’s the peanut butter. But the caveat there is that it has to be crunchy peanut butter if it’s in my peanut butter and jelly sandwich. I think that is the key to the texture of that whole sandwich, and without it I just wouldn’t even want to eat it.

Ed Black: Interesting. So, a PB&J: It’s about the way it feels. Brad, it’s been great having you on the podcast. I also want to thank our audience and our listeners for following us through. As with all of our other R&G Tech Studio podcasts, this edition will be available up on the Ropes & Gray R&G Tech Studio webpage and through every place else that podcasts are made available. Thanks so much.