Q&A with Ben Alden of Betterment

You've been at Betterment since 2014. How many employees did Betterment have when you joined, and how many are there today? Can you talk about how the company has transformed in the past 5 years?

I joined Betterment at around 50 employees, and we’ve grown to over 260 today. Betterment is the leading independent digital adviser, helping our clients do what’s best for their money so they can live better.

Ever since I started, it feels like we’ve changed as a company every six months. We’ve grown from managing about $500 million in assets in a single line of business in 2014 to over $17 billion today across three lines of business. We’ve grown from a team of young, hard-working jacks-of-all trades to more experienced specialists working within the established processes and infrastructure we’ve built over the years. And this has been a great thing, because we work in a very regulated environment in the investment management space (the SEC and FINRA are our main regulators), and maintaining the trust of our clients and regulators is critical to our mission and our success.

When I started, there was very little regulatory scrutiny on digital advice because the space was in its infancy. We and our competitors were small, and while the regulators knew we existed, we were a tiny portion of the investing space. As we grew and as large financial services providers began to build competing services, that changed dramatically. From regular audits to interesting issues of first impression, we are operating in a different environment, where everything is subject to near real-time scrutiny. As a result, our legal and compliance teams are formally involved in the product-building process, to help guide the team safely through the thicket of financial regulation. Our legal and compliance teams have grown to 10 lawyers today and we’re hiring if you’re interested. ;)

But throughout all this change, Betterment has held fast to its mission. Although our technological innovations have been considerable, the founding team’s most impactful innovation was building a financial services company that puts its clients first.

In addition to your GC duties, last year you became the GM of Betterment for Business. Tell us a bit about your dual business and legal role and any challenges it's created for you. 

One of the things I like best about Betterment is that I’ve been given lots of opportunities to grow and learn. It’s one of the amazing things about working at a company that’s growing so fast.

Betterment for Business provides 401(k) plans to great companies (let me know if interested!). As GM, I oversee our strategy, distribution, product, and operations teams, and generally do what I can to make sure the team has what it needs to succeed. I’m so proud of what we’re building in this space, and it’s been humbling to learn so much about different teams and how they operate. 

I am able to do both roles because we have great leaders heading up the efforts across legal, compliance, and Betterment for Business. The challenge, however, is being mindful of my role as I switch from one context (GC) to another (GM). On any given day, I may go from a meeting about how a new product interacts with FINRA regulations to a conversation about B2B brand marketing, to a meeting about our product roadmap, to an interview for a sales representative. To avoid conflicts (and to protect privilege), I’ve also asked the legal team to not treat me as a lawyer when I’m working on Betterment For Business matters, which means I often get a be a client of my own team! In a way, this has helped me grow both as a lawyer and as a business person, because I get to see the company from the perspective of each. 

It’s been an amazing experience, and I think getting this business experience will make me better in my GC role--I’m certainly more understanding of business needs and desires!

How has the legal team evolved over the past 5 years?

A little over five years ago, there really wasn’t a dedicated legal team at Betterment. But we’ve always had wonderful lawyers--including a co-founder--who have been deeply engaged in building and working on our regulated entities (an investment adviser and broker-dealer). 

I was originally hired as an operations manager and legal counsel. The legal team started when I realized we had operations covered, but didn’t have a legal department per se. It started like most of these departments do, with me covering a large area of ground and trying to understand the needs of the business. As I learned more, I realized we would need to proactively build our legal and compliance teams as part of responsibly managing growth in a regulated space.

Over time, the team grew to cover two major areas: (1) product and regulatory counseling; and (2) corporate/commercial work. The latter covers what you might see at a tech company at our size and stage of growth. The former is more specific to Betterment, and exists to guide our product, design, and engineering teams through financial regulation, to accelerate our product development and make it safer. 

We also have an excellent dedicated compliance team of lawyers to help us build and operate our regulated entities. At first, the legal and compliance teams were essentially one team, with people wearing multiple hats. As we’ve grown we’ve specialized more and expanded the compliance team. I really enjoy this part of the job, because I’ve come to view compliance as the operationalization of law.  

Betterment operates in a heavily regulated environment. Which regulators oversee your business and how have you navigated them?

Our primary regulators are the SEC, FINRA, and the DOL. But there are many other regulators we might interact with on a regular basis, including state securities regulators. 

We do our best to work constructively and proactively with our regulators, which we’ve learned helps all parties get what they need faster. We do this as they touch Betterment directly through exams and outreach, but also through advocacy and industry groups. We formed a digital adviser industry group and have found that to be a great way to discuss broader industry issues. 

For the most part, our regulators want similar things as we do: clients invested safely in accordance with their needs. So when we do right by our clients, we tend to be doing right by the rules and our regulators as well. Our legal and compliance teams reflect and believe deeply in this, and we view ourselves as builders--just like the business--which makes being a lawyer at Betterment fun and interesting. 

We both started our careers as litigators—how do you think that background’s helped you as a GC? Do you have advice for litigators who’ve heard that going in-house is better suited for transactional lawyers?

I am a big believer that litigators make great in-house lawyers at tech companies, especially younger and regulated tech companies. Someone once told me that of the Fortune 500 GCs, about half are former litigators. I’d love to find that statistic somewhere...

The job of a litigator, abstracted, is to take a client’s problem, figure out all the law that governs the issue, uncover the facts from all sources, mold the facts and law into a narrative that’s convincing to extremely sophisticated parties (judges, arbitrators, etc.), all while another smart lawyer is gunning for your work, and maybe you. You have to be a strong advocate, good on your feet and in writing, and you have to be flexible to adjust to the varied and changing cases, rules, regulations, courts, etc., you face on a regular basis. Most importantly, you have to be excellent at issue spotting. All of these are very useful skills at a tech company, especially in a regulated one, especially as the regulated field itself is developing.

This doesn’t mean I think litigators can or should do anything and everything, just that I think the cliche that litigators don’t go into in-house roles isn’t accurate or good advice. 

For litigators looking to go in-house, I’d recommend you look for regulated tech companies--even if you don’t have experience in the specific field--or tech companies that are early on, when your issue spotting abilities are critical.


Q&A with Enrique Colbert of Wayfair

Enrique, thanks so much for taking the time.  As a start, I'd love to hear how you landed your role with Wayfair over 5 years ago.  What's the story there and what attracted you to the opportunity? 

As with many things in life, mainly I got lucky with timing.  Around the time Wayfair was looking to hire its first in-house lawyer, I was finishing up at Aveksa, which had just been acquired by EMC.  Aveksa’s CEO Vick Vaishnavi reminded me that Neeraj Agrawal, an old friend from our days at BladeLogic, was a board member at Wayfair. Vick and Neeraj made some introductions and the rest is history.

What attracted me to Wayfair was its track record – over a decade at that point—of spectacular growth. I am a lifelong Bostonian, so being part of a local company that had so much potential was irresistible.  Obviously, our success has continued since I joined and we still have a tremendous amount of opportunity ahead..

Continued growth obviously brings challenges. You have to focus constantly about where the company is now, and where it will be a year and beyond, and prepare accordingly. Wayfair is different than it was last year, never mind five years ago, and will be a different company next year.

So you had been a General Counsel before, at both Aveska and Blue Cod Technologies.  How has Wayfair's General Counsel experience been different?

There are tons of local tech companies that have been spectacularly successful for a period of time—but it’s clear there’s a relatively short path before an exit. I’ve been lucky to be on some of those teams.  What sets Wayfair apart from other tech companies I’ve been a part of is our ability to do it year, after year, after year.

What were the immediate challenges you faced right after joining Wayfair?

I knew that Wayfair was on a trajectory to go public, but I didn’t think it would happen so soon. When I walked through the door, CFO Michael Fleisher told me that we were doing a $157 million Series B round—and then we would go public the same year. It was a little intimidating but a great immersive experience.

Separately, Wayfair had never had an in-house lawyer before.  Luckily, I had been the first lawyer at my previous two companies, and I had the right mindset to start a legal function from scratch. That has served me well at Wayfair.  When you grow 30-40% per year, you need to have an expectation of continuous learning.

What was your prior experience building legal teams and what were the hiring expectations coming into this role?

I had managed smaller teams in house and other lawyers on individual projects in the law firm, but Wayfair would be different by virtue of its rapid growth and eventual scale, and the increased demands that come with that.  At Wayfair one of our core cultural tenets is that “we are manager doers.” So the expectation of me coming into the role was that I would do everything myself until it made sense to add lawyers. Right now, we’re a team of about 12 people—still lean given Wayfair’s size.

Do you have particular hiring philosophies and/or practices that have worked well for you? What do you look for in your new hires and what hiring processes have you implemented?

I have a few. First, we cast a wide net and interview a lot of candidates.  Similarly, we hire generalists when possible and let them learn on the job. I think in-house lawyers tend to favor immediate productivity in a role and undervalue long term potential.  The GC at my first in-house role and one of the most important mentors in my career, Mike Cayer, hired me despite my having no in house or software experience, and I was very fortunate.   

A corollary to this philosophy is that I tend to prefer lawyers that are currently in law firms. They tend to be hard-charging, intelligent and detail-oriented.  There may be a slower ramp to productivity, but not as long as you might expect. On the other hand, you need to be extra careful about making sure you hire lawyers that will adapt and thrive in a different environment.

Finally, when hiring, there’s no substitute for effort in the recruiting process. I look at every resume that comes across the wire and will interview as many candidates as necessary to find the right person.  With a group our size, we view every hire as critically important.

Any hiring horror stories you could share?

We’ve hired good people. So no horror stories.  But I’ve conducted a lot of interviews, and a lot of them have gone poorly. But to put a positive spin on it, some of my worst interviews have been fascinating. I’ve spent hours trying to unpack why I disliked a candidate and tried to learn from it.

There are a lot of great lawyers out there but they are rarely trained to be people managers.  What is your advice to new GC's with little experience hiring and managing people?

Legal teams will always be smaller than equivalently important teams, and even senior lawyers and GC’s will be individual contributors in addition to managers.  I’m sure that will ring true with many of our TechGC colleagues, who run 1 or 2 person teams. So I think I would frame your question from the perspective of what it means to lead a small team: go deeper into the work itself than most of your peers at the company; lead by example, in particular in how you interact with your internal clients; and work hard to keep your team cohesive and aligned.


Q&A with Kristin Sverchek of Lyft

Major congratulations on the IPO! I hope you're able to find some time to decompress. Can you tell us how long the IPO process lasted—from the early planning meetings through the launch? 

Thank you! We started preparing in earnest in summer 2018, and officially kicked off the process in the fall. We went public on March 29, 2019, which may seem like the end of the process, but it isn’t! Following opening bell, there’s still the actual closing of the IPO a few days later, followed by the closing of the greenshoe option. For reference, this was considered a compressed schedule by both outside counsel and our underwriters, and it was made all the more compressed by the unprecedented length of the government shutdown. Miraculously we made it all happen on schedule as planned.


How would describe your team's role and responsibilities throughout the process?

Even within the legal team, we had a highly cross-functional effort. As one would expect, the corporate team led the project and did the bulk of the work, including drafting the S-1 and working with underwriters’ counsel on diligence. What might be more surprising to the TechGC community is that we also called upon a number of other subject matter experts on the legal team, including compliance, privacy, employment and product. We also relied heavily on the litigation team to make sure that our disclosures were buttoned up, and to assist in working with our auditors on the representations management needs to make to them.


Did you staff up your legal team to handle the pre- and post-IPO work?

I did, but only by a few people. I was lucky to have had a strong corporate team in place for several years, so just bolstered that existing team by adding two attorneys with deeper capital markets/securities reporting experience.


Can you describe the process of choosing outside counsel and educating them on the business? How did you and outside counsel divide responsibilities and complement each other throughout the process?  

We’d worked with Wilson Sonsini for a number of years prior to the IPO, and developed a solid relationship during that time, so there was absolutely no question we’d work with them as company counsel. Given the long-standing relationship, we didn’t need to educate them on the business. That said, I’d optimize for competency of counsel over prior relationship (we were lucky to get both). If your company is considering going public make sure you are working with one of the (relatively few) firms that regularly handles tech IPOs. As far as division of labor, Wilson Sonsini was able to give us the perspective on standard market practice, and what they saw as hot button issues for the SEC. They took the laboring oar as far as drafting sessions, and we provided the deep dive on company-specific issues when necessary.   


Is it as daunting as it sounds? How were you able to juggle your IPO responsibilities and your day-to-day GC responsibilities? 

Having that strong underlying corporate team in place made it far less daunting. I know that I’m extremely fortunate to have a larger legal team than many, but having a dedicated corporate team (at least one person!) is necessary in the IPO process so that the GC can be freed up to handle all their other responsibilities.


Like most of us, you hadn't previously gone through an IPO as in-house counsel. Did you feel disadvantaged in any way?

It’s hard to imagine it any other way, but I genuinely didn’t feel disadvantaged. So much of my tenure at Lyft has been about learning by doing, while relying on outside experts. This felt no different.


Any final words of advice for your late-stage peers who might be preparing (or preparing to prepare) for an IPO?  

Make sure to communicate early and often with your CEO & CFO before and during the process. We had weekly meetings to ensure total alignment on project and strategy. And don’t be afraid to call upon your GC colleagues for a sanity check. I spoke to other GCs regularly (both those who’d already been through the process and those who were going through it in parallel), and was able to both give and receive crucial advice in doing so.

Highlights from the 2017 TechGC National Summit

Highlights from the 2017 TechGC National Summit

Over 200 General Counsels attended the 2017 TechGC National Summit, TechGC’s annual gathering of startup and venture capital GCs from across the country for a full day of GC-to-GC learning and networking. Held on October 27th at the New York Stock Exchange, attendees shared best practices and exchanged ideas around the legal challenges of operating in a hypergrowth environment.

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

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

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:

Insurance 101 for Tech Companies

Insurance has a critical role in any tech company, whether it’s a start-up, securing seed money, or pathing toward an IPO or acquisition.  Companies should keep in mind that their insurance needs will change and grow throughout that life cycle; therefore, those needs should be evaluated on a regular basis.

The Start-Up Stage.  Most start-ups begin with a “business owners policy” (“BOP”), which covers bodily injury, property damage, and certain advertising and personal injuries.  If the company has any employees, it must also purchase workers compensation coverage, which is required by law.    These policies generally do not entail a significant premium investment and provide “basic needs” coverage.

2016 Year In Review

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2nd Annual Full Stack GC Conference, New York

What is a full stack GC? Like a full stack engineer, the full stack GC faces a multitude of diverse issues that require a full skill set. Faced with this challenge, our annual conference aimed to provide practical guidance for those of us aspiring to be the “full stack GC.” 

We had over 90 GCs (100% attendance), and top-notch speakers, including Erin Abrams (VP of Legal Affairs, Via), Jennifer Berrent (General Counsel, WeWork), Brian Chase (General Counsel, ServiceChannel), Kathryn Ciano (Senior Regulatory Counsel, Uber), Tonio DeSorrento (CEO, Vemo Education), Sarah Feingold (General Counsel, Vroom), Adam Greenberg (Lead Counsel, Warby Parker), Caroline McCaffrey (General Counsel, Clarifai), David Pashman (General Counsel, Meetup), Michal Rosenn (General Counsel, Kickstarter), Michael Yang (General Counsel, Pinterest) and Michael Zuckert (General Counsel, SVB Financial Group).


Summer Dinner and CLE at Rich Table SF

TechGC hosted a private dinner at Rich Table in San Francisco for over 40 GCs in the Bay Area. The discussion — “Identifying and Managing Governance Conflicts in Venture-backed Companies” — covered timely issues related to down-rounds/distressed M&A and informational and internal conflicts.


Other Events in 2016


 

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