As M13’s newest partner, Win Chevapravatdumrong, put his legal experience on full display last month after Silicon Valley Bank failed and was taken over by the FDIC. At the time, he was just two months in as the Santa Monica venture firm’s first in-house general counsel.
“My role in this has been to keep abreast of current events and understand the risk and legal landscape, which then helps M13 make practical business decisions for itself and provide real-time advice and updates to our portfolio companies and LPs,” he told Venture Capital Journal. “The landscape was changing by the hour from Thursday morning through Sunday evening [March 9-12], and it was important for us at M13 to keep our advice current.”
One of his priorities was to quickly get a take on which portfolio companies were more heavily exposed to SVB and to address how to support them.
“We, like many other VCs, saw that some of our portfolio companies would have challenges making payroll or addressing short-term working capital needs, so I helped provide guidance on [various matters],” he said. These included maximizing access to capital through third parties, SVB or the FDIC; understanding the legal risks and solutions available to companies missing or pushing payroll; structuring and providing capital to companies that needed it; and best practices for all of those tasks.
Before joining M13, Chevapravatdumrong spent six years as in-house general counsel at MasterClass, where he helped build and scale the online vocational education platform’s legal team and operations. His career as an in-house lawyer began in 2010 at Hulu, “where I became an in-house generalist and started understanding what it means to build a business as an operator from the inside,” he said.
When Hulu’s former CEO and CTO founded Vessel, they invited him to join the commercial video service in its pre-seed stage in 2014. Chevapravatdumrong helped launch the product and raise multiple financing rounds before Verizon acquired it in 2016 for its technology. He also spent time as an associate at Latham & Watkins and as a hardware design engineer.
Lots of hats
“As an in-house lawyer, you’re sort of tasked with managing risk across the entire business,” he said. That includes not only assisting with the firm’s fundraising efforts, but also helping founding teams know how and when to grow their business, how and when to fundraise and how to tell their story to other VCs.
M13, which launched in 2016, closed on its $400 million Fund III in March 2022 and has invested in 62 companies from that fund so far. The firm writes checks of up to $15 million for seed through Series B companies that develop technologies for consumer verticals spanning work, health, commerce and money.
Web3 extends across all four verticals that M13 focuses on. Partner Carter Reum, who founded the firm with his brother, likens blockchain – at the root of authenticating technologies – to the internet and the iPhone, which both led to new and wide-ranging innovation models.
Investing in companies that deploy new technologies demands a firm grasp of “an insanely complex regulatory landscape,” said Chevapravatdumrong. “Looking at that and being able to translate that into practical business and investment decisions is where I’ve slotted in [at M13].”
In addition to having to stay atop the legal risks around new technologies, more VCs are becoming registered investment advisers (RIAs), trading in public stocks and operating in the secondaries market, which requires access to sound legal counsel, Reum told VCJ.
“As the asset class continues to get institutionalized, as the world continues to be disrupted, having someone who’s a thought partner like Win we think will be incredibly valuable to the firm,” he said.
As an operator and GC, Chevapravatdumrong helps portfolio companies structure fundraises to satisfy constituents with differing incentives and priorities. “A company might be raising a round that involves a primary raise from new investors, as well as a secondary sale by current investors and the employee base,” he said. “When secondaries are involved, the company needs to consider how to structure the secondary – there are a host of tax and cap table management issues to think through – and ensure current investors and employees feel fairly treated.”
In addition, “Founders and employees are always impacted by a fundraise, whether through dilution or liquidity and compensation,” he said. “This has a real-world impact on people and how they behave and feel. For example, a secondary transaction may only permit early employees to participate, which could create internal people challenges around feelings of fairness between earlier and later employees.”
Among Chevapravatdumrong’s skills is one that isn’t in the formal job description for an in-house lawyer: having the influence and presence to not be viewed as someone who slows down deals.
He credits M13’s partners’ background as former operators for their receptivity to his perspective, which centers on managing risk and compliance. Operators are used to wearing many hats and appreciate the less exciting aspects of building a business, including risk, compliance and internal infrastructure, he noted.
When M13 recently explored a new investment involving a fairly novel business model and deal structure, Chevapravatdumrong said he didn’t feel pressured to rush diligence queries into possible legal and regulatory risks even though the deal was moving quickly. His fellow partners were “fully supportive of our spending the time and resources we needed to,” he said.
This is one in a series of occasional profiles about new partners at venture firms. You can suggest profile candidates to David Bogoslaw here.
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