TechGC Job of the Month: GC @ Foundry Group (Transcript of Call with Jason Mendelson)

Jobs by TechGC is a private newsletter of curated jobs is for attorneys aspiring to work in-house at the world’s leading venture-backed technology companies and venture capital firms. Each month, we select one compelling opportunity to highlight as our Job of the Month. 

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Below is the transcript of a call between Kiran Lingam, Co-Chair of TechGC and Jason Mendelson, Co-Founder and Managing Director of Foundry Group about the General Counsel role at Foundry Group:

Kiran Lingam:  Welcome, TechGC members, to our November job of the month call. As you all know, we have a lot of job activity in our community, both in terms of incoming opportunities and high quality GC candidates. We decided that it might make sense to select one compelling GC job each month to spend a little bit more time on it to hopefully make some direct and curated connections. Today, we’re excited to welcome Jason Mendelson, co-founder and managing director of Foundry Group, to talk about their recently opened general counsel role. We thought this was a compelling opportunity for a few reasons:

First, and perhaps most importantly, it’s the opportunity to work with Jason and his partner, Brad Feld, both of whom are giants in the venture capital industry. Brad and Jason are the authors of a book called Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist. This is one of the seminal books on venture financing transactions. I read it as a junior associate starting in a venture capital practice and required those I hired thereafter to read it as part of their training. Jason is a lawyer, and alongside Brad, I think they’re likely to respect and value the legal function internally.

Second, a GC opening in an established fund is somewhat rare. These opportunities don’t come along every day.

Third, this opportunity is in Boulder, Colorado, again, a rare opportunity to work at a prominent venture capital fund outside New York, San Francisco, Boston, etc. For those and other reasons, we were very excited to bring this opportunity to you all.

With that background, Jason - we’d love to hear more about yourself, Foundry, and what you’re looking for in this role.

Jason Mendelson: All right, so I was one of the first VC/GCs in the country. I was hired in 2000 by Mobius Venture Capital back in the day. Lawyer at Cooley before that. Got into Mobius. Met my partners, Brad, Seth, and Ryan, who together co-founded the Foundry Group, and along the way, I took over the COO role and the CFO role. Then somehow because the dot-com blowup started seeing a lot of boards in order for us not to get sued, we were being sued a ton, and the idea was hey, let’s put a lawyer on the board and maybe we at least won’t get sued. We’ll lose all our money, but at least it won’t be negative.

A couple of companies turned around, and as I’m sure everybody knows, the word credit in venture capital is an interesting one, whether it’s the BS of the Midas list or who’s considered hot or not. I was a beneficiary of this just sitting on boards that did well. I got credit for being a venture capitalist. Entrepreneurs kept coming to me and presenting a business ideas, and eventually, I started doing deals, which was never my intention.

Along the way, I decided to leave Mobius, and start Foundry back in 2006, and raised our first fund in 2007. We’ve had a lot of good luck so far with companies like MakerBot, Fitbit, Zynga, SendGrid, which just announced it’s going public, Admeld, Sphero, Oblong. The list goes on. We’ve been really, really fortunate. I’m a full-time venture capitalist here. In my spare time, which will be the segue to why we’re hiring a GC, I still run the firm, which includes operations, finance, and legal. I’ve had a full board load as much as Brad, Seth, or Ryan since we’ve started, and after doing this for a decade, it’s time for me to get some help. That’s the impetus of why we created the position.

A little bit about the firm: we raised our last two funds in 2015 and 2016. At this point, we’ve got programs that cover early stage, late stage, and we also invest in other funds. We’re actually a limited partner in a lot of the venture capital firms in the country now. That’s been a really interesting experiment, and a really good source of deal flow, and just keeping the people we like in the venture industry close to us. We anticipate continuing for the foreseeable future, and none of us are ready to retire. As we think about the next decade of our careers, we’ve decided that this is an essential role that we want to hire.

Kiran Lingam: What were the specific pain points that led you to open this role and want to hire a General Counsel?

Jason Mendelson: It’s so funny. When we raised our first fund, which was a $225 million fund in 2007, the idea of me being the head of the firm while being a VC was easy. It took us three years to find 25 companies. There wasn’t much going on. We were on nobody’s radar map. We weren’t especially well known or established. We’re out in the middle in Boulder, Colorado, and so people just forgot about us, and that was great.

We now have a $1.7B under management. We are on the radar. We’re a registered advisor. I basically realized that somewhere between 30 and 40 percent of my time is going into dealing with things that a lawyer is good dealing with. It doesn’t necessarily always mean legal issues. Some of them are helping portfolio companies navigate in gnarly situations. Some of it is we’ve had some gnarly situations here. For those of you who’ve ever gone in one of the VC/GC meetings, you probably know what I’m talking about.

It just seemed like, wow, there’s a lot that if I had somebody else here who was a smart legal eagle with great judgment, they could take upwards of half of my job away immediately, which was great. A lot of it was around controversies, things going wrong, things needing to get fixed. I always say that I’m the Harvey Keitel here. I’m the cleaner. I’m looking for that type of person.

Then, specifically, I also think that back in the old days when we were just a small fund, I did a good job really being proactive and helping our companies. Not acting as their lawyer, but helping them on legal issues, litigation, IP strategy, things like that, employment. Stuff that every day that they might not necessarily reach out to a law firm, but that could be tremendously value-add. The pain was – it’s acute in that a lot of my job has become things that a lawyer would be good to deal with. I also think in a day where you can get some leverage on having good partners around you to help your portfolio companies, I think there’s a much greater position here than what I’m doing right now.

Kiran Lingam: So then it doesn’t sound like substantive knowledge about fund mechanics is the most important thing as compared to generalist legal and soft skills like controversy resolution. Do you have any further thoughts on what you are looking for in terms of soft skills vs. substantive fund legal knowledge and experience?  

Jason Mendelson: Well, I mean I hope this doesn’t come out as arrogant because I truly don’t mean it this way, but I’ve been doing this for 18 years. I came from the corporate side, but there’s nobody I’m going to find, at least that I know of, who’s going to know everything we need to know. That’s totally awesome. I’m totally happy to help train. No matter what house somebody came from, litigation, corporate, or other, I actually have already pre-written the education plan to get that person up to speed. I don’t think that the perfect person needs to have a particular efficacy or experience necessarily in the venture industry. Obviously, if they do, that’s a plus, but we’re certainly not going to negate somebody’s application because they don’t have fund formation experience or even Series A drafting experience because that’s not what this position’s about. It’s a much more high level position.

Kiran Lingam: Would you consider experience at a big law firm a prerequisite?

Jason Mendelson: I probably am biased just because that’s where I grew up. I got trained amazingly well from my friends at Cooley, and I learned how to grind. I think there is some commonality, but while I’m biased, it’s certainly not necessary.

Kiran Lingam:  Is in-house experience at a venture fund a pre-requisite?

Jason Mendelson: Look it would be great, but not necessary.

Kiran Lingam: What about the scenario where somebody was in the venture practice at a law firm and then went in-house at a venture backed operating company? They probably did a few financing transactions, but not on the fund side.

Jason Mendelson: I think it’s a wonderful background. I mean somebody who’s been at a company has had to deal with the day-to-day stuff, which can be high level or janitorial, as you know. That’s my job.

Kiran Lingam: What about somebody who was at a firm, then was a mid-level at a venture fund, but doesn’t yet have ten years of experience?

Jason Mendelson: When I laid out the ten years of experience, I looked at where I was ten years ago and said, would I be capable of doing the job I want to do? My answer is just barely. So far, the resumes that we’ve received, in general, have been quite a bit more experience than ten years, so I think that the ten year – I know it’s an arbitrary number, but I think we’re going to hold pretty firm on that ten years of experience.

Kiran Lingam: So is ten years a starting point or do you think right around ten years is the ideal?

Jason Mendelson: I think ten years or more is fine. I think, again, if I could hire myself ten years ago, I would probably do it just because I know my strengths and weaknesses, but I think somebody who’s 10 years out of law school versus 20 years has got an equal chance, or 30 years has got an equal chance depending on their particular experience. The tenure isn’t the magic. I just think in order to have really the broad experience that we’re going to need to deal with all the crap that comes our way, I think you need at least a decade doing this.

Kiran Lingam: The job description says you don’t want to be a VC like Jason. Does that mean you’re looking for a “lawyer’s lawyer” versus somebody who’s maybe interested in moving to the investment or business side at some point?

Jason Mendelson: I’m hoping to hire somebody who’s here “forever.” I’m not looking at this as a temporary job or necessarily a stepping stone. I mean if somebody finds something better, that’s awesome, but I want to work with this person. My partners want to work with this person forever. If the idea is that they want to become a venture capitalist, which means we’re going to have to replace them with somebody else one day, that’s not interesting to us.

If they are a business-minded human being who wants to help us run Foundry Group as a company, however, totally open-minded to that. Nothing would make me happier to offload operational duties that I have. As I mentioned, I wear all the C title hats here, CEO, CFO, COO, and general counsel, so as many hats as they would like to take off my plate, I’m more than happy to, but I think the starting point is somebody who’s a lawyer because I really need that sort of judgment, and decision making, and the analytical skill work.

Kiran Lingam: What does the rest of the team look like?  Are there other people in  finance, HR, marketing, etc.?

Jason Mendelson: This may not surprise you. We have no marketing people at all. Those crazy music videos you’ve seen of us are completely my madness, and that’s it. We have no marketing. We have no services here. The way we run is we have only partners. We have no associates. This is not a situation where somebody’s going to come in and find a lot of politics, or red tape, or a big organization. This is a very nimble team, all senior people doing the early stage work.

We all have EAs, and we have a woman named Lena who runs our back office. She’s our VP of Finance. We traditionally have had a back office here of many different accountants and other people running around. As the funds have scaled and we’ve become registered, we needed to have a different solution and so we’ve recently outsourced our day-to-day accounting to an outsource firm, which is working really well.

Lena leads that team. Her strengths are in tax. She’s the best venture tax person I have ever met, and she is incredibly strong. She reports to me, but everything else is – for instance, we’ve divided up operational duties between the four partners.

My partner, Ryan, is head of IT. My partner, Seth, is head of networking and schwag because he likes to buy coffee cups, apparently. Brad is head of external relationships, and I run the firm and the head of LP relationships. We’ve basically operationally divided up the firm with me taking a larger load just because traditionally that’s what I’ve done, but it’s a very lean team. Somebody who wants to come in here and do more than just law is welcome, but we’re not looking for another partner on the venture capital side.

Kiran Lingam: Great, so it sounds like there is some need and opportunity to take on a more than legal.

Jason Mendelson: Absolutely.

Kiran Lingam: Great, and so you mentioned that you guys are a SEC registered investment advisor.  How do you view the need to have prior experience in that type of environment? Is there a CCO, and how does compliance interact with this role?

Jason Mendelson: Yeah, so we’ve only been a registered advisor for about 18 months. None of us here had any experience. I have a partner named Lindel Eakman who’s a partner in one of our funds called FG Next, which is the one that invests in other funds. He previously came from UTIMCO. He was the head of their private investments, and he’s a former CPA. He’s our CCO, our Chief Compliance Officer because I wear too many C hats, and it felt weird that I would have that as well, kind of balanced it out. I don’t think any experience is necessary. It’s welcome, certainly, if you have it. You can learn these things, and I do have a dream that this GC will become the Chief Compliance Officer. That is definitely our hope for the future.  

Kiran Lingam: What percentage of the day-to-day work would you classify as fund work (e.g, fund formation, working with LPs, side letters, compliance) vs. deal portfolio work (e.g., Series A docs, portfolio company controversies)?

Jason Mendelson: Fund formation happens every three years. We generally outsource a lot of that to Cooley who’s our fund formation counsel, but I’m pretty dangerous in that, so it’s every three years. It’s not something that’s at top of mind just because of it’s every three years. I’ve now, after working with Brad, Seth, and Ryan for now 18 years or 17 years together, have taught them well enough to get Series A deals done.

This is not a job where this person’s a financing junkie. I don’t look at any financings anymore. They hire their own lawyers. They do their own deals. If they have a particular problem, they come to me, but deals are getting done. Term sheets are getting out where I’m approving as a partner on the valuation and the amount in, but other than that, they’re on their own. There’s not a lot of that. This is really just high level stuff with the ability of going deep on particular points when they get tricky, but this is not a deal monkey or a deal jockey position.

Kiran Lingam: How would you describe the culture there at Foundry? That’s always a tough question, but worth asking.

Jason Mendelson: You know, it’s funny. I knew you were going to ask this question, and I’m like, I have no idea. We’re silly, smart, irreverent, hardworking, honest, transparent. I mean the thing that we always say between us is brutal honesty delivered kindly. When Brad, Ryan, Seth, and I started this company, we liked each other, and over the decade, we all became best friends. My three groomsmen three years ago were Brad, Seth, and Ryan.

We’ve now since added Chris Moody and Lindel Eakman to the mix, who were also at my wedding and also dear friends, and with us, and by the way, the wives are all friends. I know it might sound a little bit like a cult, and that’s not necessarily what we’re looking for. What I’m saying is we’ve created a culture here of support, and honesty, and friendship, and trust, and respect that we allow people to take risks, and learn, and make mistakes.

We value failure, and we celebrate honesty. I think we’ve really done as good of a job, if not better, than any other venture firm of taking politics and weird incentives out. For instance, none of us are compensated on how well deals do, which when you take that out of the mix, everybody’s job is just to make all the companies the best they can, which is why I think this GC can work with, it’s not just me, it’s going to be working with all the different partners to help our portfolio as much as possible. It’s a long-winded I don’t really know how to sum up our culture except I had never held a job longer than 2 years in my life, and now I’ve been here 18. I would never, ever work anywhere else.

Kiran Lingam: How much time do all you spend in the office? Do you guys work nights, weekends, holidays, remote, etc.?

Jason Mendelson: We work hard. This isn’t like venture in 2000 where I started where nobody worked in July and August and didn’t work weekends and stuff. This is an intense, fast-moving job. As far as locations go, we’re all over the damn place, whether it’s board meetings, or people have other locations they like to work. My partner, Ryan, likes to work in San Francisco in the summers. Seth likes to work out east. My wife and I, we like to travel. I still am online and what not. There’s not a face time company culture, office culture here, but there is a very strong work ethic, and when things are happening, people are available.

Kiran Lingam: What is the salary range?  Is there a share of carry? How do you guys think about compensation?

Jason Mendelson: I hate to be a little obscure, but it’s really going to depend on who we hire and what their experience level is. We don’t have a range that we have decided upon. We’ve talked general numbers, which start from under what we make as partners to potentially even over what we make as partners if we get the right person. We are not trying to do this on the cheap. We are not trying to get the cheapest cost source here. We are asking people what their salary expectations are, not because it’s a weed out, but we’re actually just trying to learn what the market is because I don’t believe too much in comp surveys.

We’re going to hire the best person here for the job. We’re going to offer a very competitive salary range. By the way, at least six weeks of vacation is how we work. There will be carry in the fund. It will be generous. My assistant, by the way, probably makes more than a lot of lawyers on the carry alone, and we’re proud of that. It’ll depend on who it is. If somebody’s 10 years out of law school, or if somebody’s 30 years out of law school, those are different salary requirements. We’re willing to meet each one of them, or either one of them, depending on who we decide to hire.

Kiran Lingam: Is there anything else you think prospective candidates should know?

Jason Mendelson: No, I’m just I feel really honored and fortunate that you guys would want to feature us this way. I really am happy that we’re going to be able to get this out into the wild because we’ve had a lot of interest so far. Way more resumes than I ever thought we’d get, which is great. We’re going to be thoughtful about this, and we’re going to pick a great person here. I think that this interview and the platform you’ve given us is only going to expand that. More importantly, people who are interested in it, I think should read this and decide, wow, is this a person I would want to work with. Is this a company I would want to work for because for some people this may be really attractive and for some other people I may be very unattractive, which is no harm, no foul. I really do appreciate your support of it.

Kiran Lingam: Thanks Jason.  We definitely appreciate you taking the time to speak with us today.

About TechGC

TechGC is a private, invitation only, organization for General Counsels of leading venture capital firms and venture-backed technology companies. Our mission is to drive innovation, education and mentorship in the legal industry while creating a strong peer group and community that supports each other for many years to come.

Our membership includes over 700 GCs across New York, San Francisco and Boston and we host quarterly private GC-only events across our three chapters including the TechGC National Summit and the FullStack GC Conference Series.  For more information visit techgc.co.