Editor: Ms. Hoberman, would you tell our readers something about your background and professional experience?
Hoberman: I graduated from New York University School of Law with my J.D. in 1989 and my L.L.M in 1991. I started my career as a tax lawyer at Winthrop Stimson, and for some 10 years I was engaged in a tax-related practice. In time, that evolved into working with venture funds and buyout funds, both domestic and offshore, and in portfolio company referrals. From a general tax practice I began to move into a corporate practice and, over time, I came to realize how much I enjoyed working with venture-backed businesses. Many of them are young companies whose business depends upon the technology developed by their talented founders. It is fascinating for me as a lawyer to see how these entrepreneurs evolve their technology to suit consumer and market needs, in addition to how quickly some of these companies are able to access money.
Editor: Was your practice impacted when the tech boom went into decline several years ago?
Hoberman: Absolutely. Venture capital all but disappeared during those years. New York had been caught up in all the froth and frenzy of the late 1990s and into early 2001. This was so contrary to the usual Wall Street attitude that when the bottom dropped out of the venture market, it took a long time to recover. That recovery, which I began to see in my practice in late 2004, is still underway.
As a consequence of what has occurred, there is a healthy amount of caution in the business today. Having been burned once, funds are careful to do their due diligence before investing. This skepticism, especially in the Northeast, keeps a lid on the froth that characterized the venture market in the late 1990s. However, a hot company today can definitely generate a multiple-term sheet bidding frenzy.
Editor: Please tell us about your decision to join Fish & Richardson. What were the things that attracted you to the firm?
Hoberman: Since my client base is essentially technology driven, the opportunity to have the top patent firm in the country as a platform to grow my practice was enormously appealing. The synergies are very visible here. Almost all of my clients need advice with respect to copyrights or patents, in addition to the general corporate, tax and employment guidance. At Fish & Richardson, I am able to provide them with the services they have come to expect of me and the number one technology practice in the country.
Editor: Although you are new to the firm, can you give us an overview of the Venture and Technology Group and its work?
Hoberman: The Venture and Technology Group realizes the synergies to be had between corporate and technology. The idea behind the group is to offer patent and other intellectual property work in tandem with corporate work. The technology advice adds value to the corporate deal, and this is only possible where a team consists of lawyers who understand the technology and the ways in which it can be used to underpin a corporate deal. This does not occur where these legal services are segmented.
Editor: Who are the clients here? Established concerns? Entrepreneurial start-ups?
Hoberman: Fish & Richardson clients have included Thomas Edison, the Wright brothers, Alexander Graham Bell, and the like. Currently, established concerns include 3M, AOL, Adobe, Astra Zeneca, Bose, Boston Scientific, Microsoft, Porsche, Steinway, and other major enterprises.
Some notable clients of the Venture and Technology Group include Major League Gaming, which organizes professional gaming competitions for console gamers. This is an extremely hot area because it permits advertisers to connect with the hard-to-reach demographic of 15 to 25 year old males. Another client is Built NY, which makes attractive neoprene bottle holders, totes and baby products that are available to consumers through such stores as Bloomingdales, Sur La Table, Brookstone and MoMA. Another is Right Media, a network of intermediaries that facilitate the sale of Internet advertising space. This is a fascinating early-stage company that is generating a lot of buzz. I also work with a company that incubates and monetizes cutting edge advertising and branding technologies called Brand Experience Lab. Almost all of these enterprises derive from the point at which business and technology meet.
Editor: What are the principal industry sectors being served?
Hoberman: Much of the work that I currently handle is in the media space - including Internet technology and software - and thus reflective of market-funding trends. I have also represented many companies in the telecommunications and life science industries. Fish & Richardson is known for its work in telecommunications, media, entertainment and biotechnology, among other things. The firm also represents a considerable number of general software technology companies. This makes the firm a natural fit for my practice.
Editor: And the services?
Hoberman: The idea behind the Venture and Technology Group is to offer a "one-stop shop" to service the early- to mid- to late-stage company and venture funding vehicles. My practice has grown primarily as a consequence of my connections to a variety of funding sources. Venture fund formation, both domestic and offshore, and even hedge fund formation are areas of considerable activity right now, and they are essential to the Venture and Technology Group.
On the structuring side, one of the important considerations is how an early-stage business can set itself up to take advantage of tax benefits and access the funding sources. Many form initially as limited liability companies, a vehicle that offers considerable tax benefits. Few continue in that format, however, because few funding sources will invest in something that is not a corporation. We handle a considerable number of these conversions, which, when done properly, offer some interesting tax planning opportunities, especially for company founders.
Fish & Richardson offers a program called Acceleredge, a fixed-price menu of services for the early-stage business. For $2,500, an organization is set up and all formation documents are completed. For another $2,500, all of the employment-related documents, including option plans, are done. Another $2,500 results in the trademark issues being addressed. This was a factor in my decision to join the firm. Many large firms are not enamored of the venture space, which, inevitably, includes companies which are not successful in being funded. For Fish & Richardson, however, this area represents a long-term investment, and the technology platform in particular is one where today's entrepreneurial start-up may turn out to be tomorrow's major corporate client. The Acceleredge program is a part of this vision.
Editor: And the joint venture and alliance area?
Hoberman: The various stages of a venture-backed company's existence go from "How can I pay the rent?" to "How many hundreds of millions can I negotiate on my exit?" As companies progress through these stages, their funding rounds become more strategic. In place of investment, companies seek strategic ventures that might position them for a more successful exit. These strategic alliances often draw on many legal disciplines from tax to licensing. My tax background is a considerable resource, particularly with respect to strategic tax planning and structuring.
Editor: Speaking of which, I gather you are able to draw upon other disciplines and practice areas within the firm to staff your projects.
Hoberman: Absolutely. We draw upon a number of different areas, including corporate, employment and taxation. The different practice groups and, indeed, the different offices work together seamlessly. At the moment, one of my clients is being serviced by our patent group in Boston, by our employment colleagues in California and by corporate attorneys in New York. This is standard throughout the firm.
Editor: What do you see as the trends today in technology, the hot areas?
Hoberman: I like the advertising efficiency space. Anything that gets companies more efficient advertising and a more targeted reach, whether through the Internet or mobile phone technology, seems to be very fundable. These companies are getting a lot of attention.
Biotech is also very hot right now. On the West Coast that industry is booming, and, of course, it is a sector that is particularly attractive for long-term investment. Medical devices and pharmaceuticals are also doing well.
Editor: What are the key points of alignment in this convergence of business and technology?
Hoberman: I referred earlier to the synergies that the Venture and Technology Group employs in providing services to the venture-backed company in particular. Most of these organizations need some type of technology-related advice. To understand that need and how to go about addressing it and, at the same time, to utilize it in connection with access to funding sources is the point of alignment in this convergence of business and technology.
Editor: How has the venture market changed in the last five years?
Hoberman: It is interesting to watch the evolution of a term sheet for an early-stage business over this period. Up to the time that the bottom fell out of the market in 2001 the term sheets reflect the fact that investors were calling the shots. They insisted on significant liquidation preferences, full ratchet anti-dilution protection and other investor-friendly terms. Today the pendulum has shifted toward the company. Funds are sitting on a great deal of money, and they are looking for deals. If hedge funds - with their enormous buying power - succeed in breaking into the market, it will become even more competitive. The venture funds have been doing this for some time now, so they have the expertise to take the right investment steps, whether the enterprise is early-stage, mid-stage or late-stage. The hedge funds are going to have to develop that expertise. The hedge funds have structural hurdles of their own, in addition, and it will be interesting to see whether, in entering this arena, they continue with the hedge fund model which pays fees to the manager based on the value of the portfolio or shift over to paying fees on the basis of recognition events. All in all, it is a good time for a company to be looking for money.
Editor: What about the future? Where would you like this practice to be in, say, five years?
Hoberman: I want Fish & Richardson to be the go-to firm for venture-backed companies and venture funding sources. I want to create a place where these companies can take advantage of a great technology platform that is wedded to a great corporate platform.
I am particularly attracted to the entrepreneurial fearlessness of the early-stage client. It is exciting to work with this type of client, and in the practice we are building at Fish & Richardson I believe we are going to see many of them achieve success. This is an excellent time, and a particularly exciting place, to be engaged in this type of practice.
Published April 1, 2006.
