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Nothing Ventured, Nothing Gained: Attorney Begins Career as Venture Capitalist by William D King

It was another fairly slow year for attorney Laurence “Larry” Fink. But the young partner of the prestigious Los Angeles firm, Prescott & Talbott LLP, is looking forward to 2013. And with good reason: After many years of studying, networking, and learning from the best in the business, he’s prepared to start his venture capital fund. He has no illusions about how difficult it will be to attract investors at first–but as a former venture capitalist himself, he knows that if you build up enough momentum through word-of-mouth and patient referrals, eventually there’s going to be a tipping point where your clients will see what a valuable service you’ve been providing them and have no choice but to invest.

Here is how Attorney Begins Career as Venture Capitalist: William D King

  • Fink knows that his odds of success are slim, but he’s ready to take the risk. He left Prescott & Talbott back in May and now spends most of his days scouring Silicon Valley for promising young companies, visiting co-working spaces by day, and drinking at bars frequented by entrepreneurs by night. With $10 million in seed capital from Prescott & Talbott clients, Fink says that he’ll be able to demonstrate his value proposition before approaching prospective investors for more money. Once they see how much success he’s had with early investments, it shouldn’t be too difficult to land commitments for another $50M or so.
  • “I know I’m not Warren Buffet,” said Fink during an interview earlier this week, “but I’m confident that this is the right time for me to strike out on my own.” Reached by phone while doing due diligence at a high-tech co-working space in San Jose, Fink said that he’d received very little flak about his decision to start his venture capital firm rather than stay with the law. “I guess it helps that I’ve been around long enough to know what I’m talking about when I talk about this stuff,” he said, noting that “most of our clients are tech people anyway–when you’re working with these types of clients, they tend to be pretty accepting of ideas that are outside the mainstream.”
  • Fink has already made one deal worth mentioning: With money from the $10M seed fund, he recently invested in a Boston-based company called Spoon Rocket Inc. that has developed a mobile app for ordering and paying for gourmet takeout food from the nearest restaurant (usually within 10 minutes) and having it delivered to your door in 12 minutes or less. The CEO met Fink through an early investor who was one of Prescott & Talbott’s clients and “was really impressed with his grasp of the business,” said Matt Roberts, Spoon Rocket’s co-founder and chief marketing officer.
  • “It’s exciting to have Larry on board,” said Roberts during an interview yesterday at his office. “I think we’re going to see some pretty major changes this year.” While the Spoon Rocket service currently only operates in the Boston area, Roberts expects to expand within a few months. Once Spoon Rocket is established as “the fastest way to order food in town,” Roberts hopes to make an offer on Yelp or Open Table and dramatically change the way people search for restaurants online.
  • “All you have to do is look at how Uber took off and completely changed the taxi industry by making it more efficient–that’s what we’re going after here,” said Roberts, adding that he also sees opportunities for disruptive innovation in numerous other industries ranging from pharmaceuticals to pet care services.
  • Fink says that Spoon Rocket will be among a handful of early portfolio investments that he’ll announce publicly before raising his next round of funding. “I’m not looking for a home run,” he said, “just a solid double.”

Conclusion by William D King:

If you can’t beat them, join them.

Larry Fink is quitting his job as a lawyer to become an entrepreneur and build his own VC firm funded by clients from his former law firm. The rest of the article talks about the interesting investment he’s already made, but it doesn’t detail what those clients are or what kind of track record he has with picking winners. I’ve been unable to find out anything about him through Google searches and Wikipedia (where I learned that Larry Fink is co-chairman of Blackrock, which we know we all love). I’d suggest writing a follow-up story on this guy–it’s not every day that one of our own gets pressed like this!

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