Venture Capital Lawyer Reflects on San Diego's Startup Ecosystem and Billion-Dollar M&A Deals
An interview with Jeremy Glaser (@SDVCLawyer) discussing all things Crypto, SPACs, IPOs, and M&A deals in San Diego.
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Founders,
Jeremy Glaser has been an incredible interview source over the years.
A top lawyer with more than 30 years experience advising hundreds of companies.
He has helped me pay attention to interesting M&A deals and venture capital trends.
Glaser provided his insider perspective on San Diego’s booming startup scene.
Please enjoy this interview.
High-Level Overview
We talked about:
His thoughts on cryptocurrency and its future
Notable VC, IPOs and M&A activity post-covid
Economic slowdown, recession (boom/bust cycles)
Working in San Diego and what keeps him motivated
Crypto
Question: What is your take on the whole cryptocurrency fiasco?
“There's so much to talk about it out there,” said Glaser. “This was quite a few years ago, during the beginning of initial coin offering (ICOs), a client asked me to assist him with one of these,” he said.
Glaser then looked further into this by reading memos from other major firms working in the space.
He then concluded that he did not see any plausible argument: that all ICOs that were being minted and sold had any legitimacy, given that in his opinion they were securities.
I then asked Glaser, if he thought whether cryptocurrency had the potential to become the next big thing?
He confidently stated: “No I don’t think so,” but he tries to remain open minded towards new technologies.
“I have yet to see any cryptocurrency that is being used to create value. I believe most if not all are securities. There is likely a lot of industry people who will vehemently disagree, and that is fine,” he said.
SPACs
Question: Do you think this whole SPAC thing is a good phenomenon?
Instead of answering directly, at first, Glaser shared one of his favorite quotes:
“History Doesn't Repeat Itself, but It Sure Does Rhyme,” he said.
“Every time we have some sort of exciting new technology, it is usually coupled with a dramatic expansion of money supply, causing these bubbles to happen. I've been practicing law since 1985, so I’ve experienced the Black Monday crash, Commercial Real Estate Bust, Dot Com Bubble, Residential Real Estate Crash…”
This stuff happens all the time,” he added.
Glaser is not denying SPACs were helping young, untested and companies go public faster. In fact, he recalled helping a private company, who needed assistance with a so-called de-SPAC deal, and as a result Mintz helped the first San Diego-based company go public via SPAC in 2019.
After that deal, law firms across the U.S. began to assist with a record number of SPACs during that period, which continued into half of 2021.
“We did a lot of those transactions,” he said. “This is a tough one. I have a ton of opinions on SPACs, but they are probably not publishable.”
Picking winners
Question: What qualities do successful entrepreneurs have that others don’t?
Glaser has two key things he looks for when distinguishing whether a company will be successful or not. While it doesn’t guarantee success, it does increase the chance of getting to a successful IPO or M&A exit, said Glaser.
He looks for:
(1) Whether the technology is investable by venture capital funds.
(2) Whether the team has what it takes to build a world-class team that investors would back financially.
“It's has been a debate as long as I have been in the venture capital world. What's more important, the team or the technology? People make pretty good arguments on both sides,” he said. “I personally like to play both sides.”
IPOs
Question: There were many lucrative M&A and IPOs deals completed in recent years, can you talk about which sectors benefited the most?
Here’s the reality: It was a great window of opportunity for biotech entrepreneurs to get access to capital. “Tech companies did not see as many IPOs, but there was an uptick in private investment,” said Glaser.
He recommends checking out Connect with San Diego Venture Group’s VC funding tracker to see which local companies have recently raised capital. (Glaser has been as long-time Board Member at Connect, since 1998).
“It was great for the local economy and served as a wonderful time for companies to get funded,” he said. “Hopefully companies are able to move their therapeutics and devices along accordingly. I was certainly involved in a number of those deals.”
Down Rounds
Question: Do you think we’ll see more down round financing in this year?
“There is no question,” he said. “I've worked through a number of these corrections, and they always end up with significant down round funding.” Glaser thought it would happen much sooner.
Many founders are opposed to raise down rounds because they believe it will send a message to employees, investors and customers that the company is doing poorly or could shut down.
Still, companies that navigate the slowdown could emerge stronger in the long term.
“I was on a call yesterday with a local venture capital fund, walking them through: how to structure a down round with existing investors, what the options are, and what new investment trends look like. It’s already happening,” he said.
Long SD
Question: You’ve spent the majority of your time in San Diego? Do you see yourself moving? What keeps you motived?
Glaser said he sees himself remaining in San Diego.
While the majority of his colleagues moved to cities including New York and Washington D.C., Glaser decided to carve his own path by moving to California.
“In 2006, we opened up an office in San Diego because we saw it was a great fit,” he said. “We’ve grown the office to more than 60 attorneys locally and its now a full-service office.”
These days, what keeps Glaser going is: “knowing that I’m helping entrepreneurs fulfill their dreams.”
“That's what gets me up every morning. It’s passion and knowing that my work is helping them fulfill their dreams,” he said.
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