The transcript from this week’s, MiB: Eva Shang, CEO, Legalist, is below.
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This is Masters in business with Barry Ritholtz on Bloomberg Radio
Barry Ritholtz: This week on the podcast. What a fascinating conversation. Eva Shang co- founded Legalist while she was in Harvard and then subsequently dropped out with her co-founder to launch what essentially became an alternative credit fund that specialized in litigation financing along with two other types of credit related to litigation outcomes. Really a, a fascinating combination of legal insight and technology. Initially this began just by scraping the state of Massachusetts judicial websites, all the different cases that were there, the different motions who the lawyers were on each side and they had no idea what they were gonna do with this data until eventually they go to Y Combinator and general counsel there says, no, you, you have a goldmine here. And it’s, you have to focus on financing the litigation cases with a high probability of a successful outcome, but where the plaintiff doesn’t have the capital to see it through and are up against the deep pocketed defendant who could just wait him out. I found even to be just very interesting and I’m intrigued by the business model, they created really a white space that a handful of multi-Strat funds might have been doing something with, but there really wasn’t a dedicated alt credit fund, especially one with nearly a billion dollars in client assets focusing on I I found this to be really fascinating and I think you will also, with no further ado, my discussion with Legalists Eva Shang,
Eva Shang: Thank you so much for having me.
Barry Ritholtz: So let’s just go to Cambridge and, and talk about you drop out of Harvard at the age of 20 to start an alternative investment fund. What were you thinking?
Eva Shang: That’s a great question. So back in the day, my co-founder Christian, was actually the one who came up with the first seedlings of the idea to start legalist. And what happened was he was very interested in data scraping and he had taken some classes with a CS professor who did data scraping and one day he decided to scrape the Massachusetts State court record website. Now this is a website that had cost the state $70 million to make and it was extremely janky and his intent was just to download all the information and then see what he could do with it. But keep in mind, he didn’t have access to any of the standard web scraping equipment. He didn’t have access to Amazon web services or cloud hosting, so he just bought these
two Mac minis, which are like Mac computers that don’t have
Barry Ritholtz: Browsers. Right, so little squares, right?
Eva Shang: Yes, exactly. And he just set them up and started trying to download and scrape all the information. Now as it turns out, he was downloading at two hi of a pace, and so Harvard caught onto the fact that there were just massive gigabytes of information passing through to this one dorm room in dumpster. And so he came to me and said, would you mind if I just put these computers in your dorm room and then they can sit in your corner and then scrape using your internet? And I was like, what’s going on here? And so that’s kind of how I got roped into this business where we decided to form a a corporation and our intent was just to download the data and then question mark, question mark. So, so you
Barry Ritholtz: Had no idea where this was gonna go initially. It’s like we
Eva Shang: Had no idea. Yeah, let, let’s see what happens.
Barry Ritholtz: And that’s just with the, with Massachusetts, right? Were you also involved in Y Combinator while you were at Harvard as well?
Eva Shang: Yes. So we got into Y Combinator the summer of 2016 just off of this legal analytics idea. And after we got into Y Combinator, basically the very first day, the general counsel who kind of keeps a watch over all the legal tech companies pulls us aside and is like, I don’t think your business idea is very good. Okay, I don’t think this legal analytics thing is gonna work out for you. Lawyers hate to pay for things, they like to get paid for things. I don’t think you should be doing this. And we were like, well, we just got here so we’re gonna do our old idea, thank you very much. But throughout the course of the summer, he kept on saying to us, you should really consider getting into this area called litigation finance. And eventually we realized the same thing that he did, which is that lawyers don’t like to pay for things, right? And we were like, okay, so what should we do? And basically what he said was, if you’re able to have this real time coverage of all these hard to access court dockets, then what you could do theoretically is pick out the cases that are going really, really well and invest in those. So you could cherry pick your own portfolio.
Barry Ritholtz: That raises the question, if they’re going really, really well, why would anybody want to take outside funding when they wanna see it through and maximize their returns? Or are these so expensive that
even the cases that are going well need a little outside financial help?
Eva Shang: So I think when people think about litigation, they imagine how it is in the movies where you file a case and then you go to trial the next day. Oh no. And then a judge hears your case. So in reality, what happens is, you know, let’s just take a prototypical scenario where you have a business that gets acquired and I’m the founder, I’ve been working on this business for a long time, and after the acquisition, the company that acquired us strips away all our resources. So then I don’t hit my earnout and that’s part of the acquisition price. And now I file a lawsuit thinking that tomorrow I’m gonna get my $10 million earnout. But in the meantime, not only have I not been paid my earnout, but I also don’t have money to pay my lawyer. And so I might scrape together some change, get the complaint filed, the case is going well, you survive some initial motions, but trial is still two years away. Right? And so that’s really where a litigation funder could come in and say, okay, leave the legal fees to us. Not only will we pay for it, we’ll keep your lawyer on a budget, we’ll make sure the case stays on track. We’ll offer our analysis of it compared to the thousands of other cases we’ve evaluated, and we’ll make sure that we are your partner until the end.
Barry Ritholtz: What does the founder have to give up in exchange for all that financial support? What is legalist share of the outcome?
Eva Shang: So the way that litigation finance works is that it is nonrecourse, which means that if we invest in a litigation and it loses right, then we don’t get repaid.
Barry Ritholtz: All the risk is on you. [Right.]
Eva Shang: Exactly. But if the litigation wins, then we share in the upside. So we normally aim to take around 30 or 40% of the case, depending on how long it goes for.
Barry Ritholtz: So it’s almost as if it’s a lawyer charging a contingency fee. Exactly. Hey, you don’t have to pay me any legal fees for this car accident, but if we win, I take a third of of the outcome more.
Eva Shang: Exactly. Exactly. And there are types of cases that lawyers take on contingency. Frequently contingency lawyers are the original litigation funders, but in order to put together a diversified portfolio, they only have so much time. And so they usually do things like personal injury, employment, class action, things that are predictable and which where they have a lot of control and cases settle quickly and earn earnout case or a commercial case or a breach of contract case, those cost hundreds of thousands if not millions of dollars. Right. And lawyers don’t really wanna put in all that time for free.
Barry Ritholtz: So you’re at Y Combinator over the summer, when do you decide, hey, this is a real business and I think I should drop outta Harvard to do this?
Eva Shang: Yeah, so after we decided to switch to doing litigation funding, we went to John Levy who’s the general counsel at yc. And we were like, okay, what do you know about litigation funding? And he said, the only reason I know about it is because I have friends who work in insurance. And insurance is the mirror image of litigation funding except for the defense side, right? They keep the lawyers on track, they pay the defense costs, and they really don’t like that litigation funding now exists for the plaintiffs,
Barry Ritholtz: Right? ’cause they have a giant financial advantage being part of a Exactly. A big perpetual insurance company versus lawyers come and go.
Eva Shang: Exactly. So that was pretty much all we needed to hear to actually make the switch. But then once we made the switch, it was a lot more challenging than we initially expected to actually raise a fund. There’s that John F. Kennedy quote where he says, you know, we go to the moon, we choose to go to the moon. Not because it is easy, but because it is hard. I think a lot of startup founders are actually the opposite, where it’s like we choose to go to the moon, not because it’s easy, but because we think it’s going to be easy. I think if we had known how difficult it would be for two 20 year olds to raise a fund to invest in litigation, it was just such a crazy idea at the time that we would’ve been like, yeah, no thank you. We’ll do something else.
Barry Ritholtz: So when you launch, there aren’t a whole lot of dedicated litigation finance funds, but you’ve become successful. Are you attracting competition? Are other people saying, Hey, we didn’t realize this was so doable. What’s it look like out there?
Eva Shang: So at the time that we launched, there were already public companies that were doing litigation finance. One of our LPs likes to say, he likes to say that he invests in managers where it’s so time consuming and difficult to do what they’ve done, that no one in their right mind would do it. And if they could go back in time and redo it, even the founders wouldn’t do it over again. And I kind of think that our business is a lot like that. If you were to go into litigation finance at the outset, you would not want to raise a really small litigation finance fund, hire an engineering team, build an algorithm, scrape millions of court records, do hundreds of investments in a given fund, you would do what all the other litigation funders do, which is invest in 10 big cases with law firms that you’re familiar with. Huh.
Barry Ritholtz: Really, really interesting. So, so you drop outta Harvard, is that 2017?
Eva Shang: We drop out of Harvard in 2016 and it takes us a full year to raise our first $10 million fund in 2017. Wow.
Barry Ritholtz: So stay with dropping outta college. First of all, what did your parents say? They must have been bereft.
Eva Shang: My parents are immigrants and so they feel like playing it safe is always the way to go. But while I was at Harvard, it quickly became apparent to me that nothing you do plays it safe. Like you can either be in lockstep with everyone else and do the whole recruiting for a consulting firm and then working at a consulting firm and then going to business school and then you know, ascending the ladder right. And not take any chances or you can choose to do something else. And for a long time I didn’t know what that something else would be. And when it presented itself to me, it became very obvious that this is the direction the universe was calling for me to go in. Huh.
Barry Ritholtz: So you raised 10 million in your first year, 10 million, is that right? That’s right. Right. In the first year, that was the first fund. And then you are involved with the Thiel Fellowship, Peter Thiel’s Award to young people who he’s looking to, Hey, get out in the real world, you don’t need to go to school. Was how helpful was Peter Thiel’s capital?
Eva Shang: So the Thiel Fellowship is a a hundred thousand dollars grant that’s given to people who drop out of school. It’s given to the individual rather than to the company. But it did create a little bit of a problematic situation for us early on because he was known for his own litigation funding situation. Well,
Barry Ritholtz: The whole thing with what took place with Walker and Right, right. Hulk Hogan. There even was a book on it that was actually quite fascinating. But
Eva Shang: But that’s not actually litigation funding. That’s right. That case is not commercial.
Barry Ritholtz: That was a Grudge.
Eva Shang: That was a personal grudge, but, and it just goes to show you, even when only two people know a secret, it, it still eventually comes out. Which, which is was my big takeaway from that book. But back to the fellowship, did it help you raise other assets that people say, oh, Peter Thiel is successful if he’s putting money into Eva? Well, he must see something there.
Barry Ritholtz: Not really, but we did get a lot of questions about whether we were going to be suing media companies. And the answer was always no. Media companies are not usually very
Eva Shang: Collectible. That wasnt especially profitable. Yes. You just, that was, that was, you know, when you sue a small website into oblivion, right, there’s not a lot of cash to to pay
back. That was just, I’m gonna spend what it, what it takes because I’m not happy with these people. You guys are in business looking for an economic outcome.
Barry Ritholtz: That’s right. Not a personal outcome. So the sounds like the first year of raising capital for legalist was very challenging. At any point were you thinking, Hey, maybe I should go back to college, maybe I should go to law school. And were you, were you ever thinking about taking the bar or going to law school?
Eva Shang: So I was thinking of going to law school, but what ended up happening was that in California there is a law office study program, right, where you can apprentice under a lawyer and you have to study for a certain number of hours per week. And Christian and I ended up doing the law office apprenticeship program starting in 2018 with our general counsel at the time, Curtis
Barry Ritholtz: At Legalist?
Eva Shang: Legalist gc. And that took us almost five years. And then we ended up taking the bar exam last year and we both passed.
Barry Ritholtz: Oh, that’s so congratulations. So now congratulations.
Eva Shang: So we actually are lawyers
Barry Ritholtz: That, that’s amazing that you, you went that route instead of going to college, finishing college and gonna law school. Tell us a little bit about your partner, Christian Hay. Am I pronouncing that right?
Eva Shang: Hague Christian Hague
Barry Ritholtz: Hague. So he’s your co-founder. He’s the person who was initially scraping all the data off of the Massachusetts court system websites. He sounds more like a, a computer science geek than a a, a legal geek. What was his background and, and tell us a little bit about how you guys met.
Eva Shang: So Christian was studying economics and computer science. And I actually think he’s incredibly operationally minded and just one of the smartest people I’ve ever met. And the crazy thing is that we’ve known each other for over 10 years at this point. And it’s definitely one of the most important relationships in my life. And when there’s a fire at the company, when the two of us leap into action to solve it, there’s really nothing like it. It’s like when you have someone that you’ve worked with for so long and you basically know what they’re gonna say or think before they actually say it. And over the years, a lot of people that I’ve talked to disparage these 50 50 partnerships because I think they think it’s riskier if you can’t come to an agreement. And what I actually think is that anything that’s so worth doing has a lot of inherent risk.
And so if you make a partnership work, it can actually work much better than just having one person be in charge. So I’ll tell a story about why I think it’s so difficult to do what we do or to even just start a business so young alone. So I mean, for the record today we have over 400 investments and 75% success rate, hundreds of realizations. But back in the day when we had our very first case lose, it was only $150,000 investment. But it was our very first loss and it meant a lot to us because it threw into question our entire business model.
Barry Ritholtz: Eva Shang: Was that your first investment or was that your first loss then you had subsequent you had previous winners to that?
00:16:47 [Speaker Changed] It was one of the early cases and it was our first loss. So I just remember feeling like the entire world was falling. And we were also so young that we hadn’t been through a lot of bad things happen in our life. And so Christian and I, we snuck into the back of a Costco because we didn’t have a Costco membership. And then we bought those $1 50 hot dogs that they sell at Costco. And then we ate it for dinner more grossly. And we were like, this is the dinner we deserve. And I can’t imagine what I would’ve done if I had been doing this alone. So that’s why I think a lot of people weren’t against partnerships because of the two Sigma problem where if you can’t get along with your partner, then the whole firm collapses. But to us, I think it’s one of our major superpowers. Huh,
00:17:32 [Speaker Changed] Really interesting. So the initial strategy of litigation finance comes from the general counsel at Y Combinator. Why did it, do you think it took so long to convince you that that was the way to monetize the tech that you guys had developed? Scraping state judicial records,
00:17:55 [Speaker Changed] Litigation finance is a very obscure asset class. It’s really not the first thing that a college kid would think of as a business to run. And I also think that one of the features of being young is that you can’t recognize or understand good advice even when it comes your way. I remember there was one other hedge fund that did credit on these P two P lending platforms that was a few years ahead of us. And back when we were trying to raise our first fund, they had already raised a few hundred million. So I went to their office and I was like, give me your advice. How did you do it? And the two tidbits that I remember from that conversation were, he was like, I’ve got this really nice expensive pair of shoes, they’re like $700. And I also have these business cards that are very professional and they have just a lot of heft and texture.
00:18:51 And it took a really long time for the moral of that story to actually become apparent to me because I was perplexed by this information for just such a long time. And it was only years later that I was like, oh, what he’s really saying is when you’re young, you should try to look professional and institutional and reassure investors, especially LP investors, that you’re not gonna lose their money. And he was using those details to make a point, but I was just too naive to understand what he was actually saying. Huh. So I think a lot of advice is like that if it comes to you at the wrong time, it’s as good as if you didn’t hear it at all.
00:19:26 [Speaker Changed] It, it’s very hard to take advice when you’re young ’cause you don’t have a frame of reference. Right. You don’t have the breadth of here are the range of, of possibilities. Right. And that’s why this advice is, is really useful for someone who’s been through that re really very, very interesting. Now what, you’re almost, the firm is almost 10 years old. What sort of advice are you getting now that you might be paying more attention to that in 20 16, 20 17 just went right by without a whole lot of notice.
00:20:01 [Speaker Changed] I remember one of our advisors and LPs, who’s a billionaire, came by our office and I was like, what’s the secret to your success? And this was when I think I must have been like 22 or so. And he was like, hire good people and retain them. And I was like, well obviously what else?
And then the, the farther I get into the business, the more I’m like, oh yeah, that is the main thing. It’s just that when you’re at that stage, it’s not apparent to you exactly how to apply it.
00:20:32 [Speaker Changed] And, and that’s really interesting. One of the things you don’t realize when you are making your first, I don’t know, 10 hires, first dozen hires. Yeah. That five or 10 years down the road, that group of people you’re hiring are gonna be the ones doing the subsequent hiring down
00:20:48 [Speaker Changed] The road.
00:20:48 [Speaker Changed] Yeah. Yeah. And you just can’t anticipate that until you’ve lived through it. And then it’s like, wow, those were really important hires that first, you know, five or 10 people Right. Makes such, it sets the tone for everything going forward. And there’s no way to understand that until you’ve lived it. And maybe that’s where the advice aspect comes in.
00:21:07 [Speaker Changed] I also think that the cohesion of an organization is so much more important than how talented the individual parts are. So there’s this children’s book called Enders Game, which I’ve always loved. You’ve read it,
00:21:23 [Speaker Changed] I don’t know if I would call that a children’s book. I mean it’s a sci-fi book. Yeah. Scott Orson card. Is that
00:21:30 [Speaker Changed] Right? Orson Scott card. Yeah. Yeah. But in or in Enders game, you’ll notice that at the very end, they don’t bring in the top kids from every class they bring in.
00:21:40 [Speaker Changed] Spoiler alert. Yeah.
00:21:42 [Speaker Changed] And when it, when they’re actually battling the aliens for the final battle on behalf of all of humanity, I’m outing myself as a huge nerd here. Right. But they bring in Enders closest friends. Right. The, and these are people that he respects.
00:21:53 [Speaker Changed] It’s the team, not just, not just one person. ’cause all these, any challenge against high yard, high odds, it it’s never just Michael Jordan. It’s gotta be everybody around him. Right. Right. And if you look at I I I, I don’t wanna go into sports metaphors ’cause occasionally a Michael Jordan can carry a team, but even the bulls didn’t start winning until he had good players around him. And it made a big difference.
00:22:18 [Speaker Changed] Yeah. And I always wondered why huge bureaucracies could sometimes lose to startups. And it’s because there is so much internal energy that’s spent fighting each other. And the lack of cohesion means that you can’t all row the boat in the same direction. There’s actually energy working against each other. And that’s one of the reasons why many of our employees have been with the firm for five plus years. And why that kind of trust and loyalty and culture is I think the, the root of what enables everything we do today.
00:22:53 [Speaker Changed] Let’s talk a little bit about the process of litigation financing and some of your other strategies. The flagship strategy, obviously litigation financing. You mentioned you’ve done about 400 financing so far. Is that about right? That’s
00:23:09 [Speaker Changed] Right. We’ve done over 400 deals.
00:23:10 [Speaker Changed] And how many of these have reached their conclusion
00:23:14 [Speaker Changed] Over 130.
00:23:16 [Speaker Changed] So you’re about a third of the way through the initial, the first, let’s call it five years or so, seven years of financing.
00:23:23 [Speaker Changed] It’s been a long time. It’s almost 10 years, eight years. Right. I mean, so we raised our first fund in 2017. Second fund in 2019, third fund in 2021. I think the pace of the number of deals we do is definitely accelerating, considering the fact that we only had 10 million for the first two years. But we’ve learned a lot along the way.
00:23:44 [Speaker Changed] And in 2022 you raised $400 million. That’s a pretty hefty number for what was then, I guess a 5-year-old fund putting together a good track record. Let’s talk a little bit about the sort of returns you target and how long these should take. So you have 400 investments done since 2017. About a third of them have reached fruition. What’s the win-loss rate? You mentioned 75% before.
00:24:12 [Speaker Changed] That’s right. So we win about 75% of the deals that we do win being calculated as it makes above the amount that we put in and loss being anything below principle.
00:24:24 [Speaker Changed] So you could actually win the case but not be financially successful. ’cause the returns are less than the initial investment.
00:24:31 [Speaker Changed] That was the big thing that we learned in the early years. So in the early years we only had 10 million of assets, but we had billions of dollars of deal flow. And so what we would do is we would work with other litigation funders, multi-Strat, hedge funds that did litigation funding and we would refer cases to them and watch how they did their work. And what we noticed was that litigation is essentially like an envelope with a check in it. You do not know how much is written on that check.
00:25:01 [Speaker Changed] Oh, it’s a sealed envelope. Yes. You can’t, you can’t see it’s
00:25:03 [Speaker Changed] A sealed envelope. Right. And everyone has their best estimate of how much is in that check, but theoretically, if you were to buy the envelope for $10 or even $10,000, you would always make money. A defendant is always willing to settle for at least $10,000. Right. Just to avoid paying their lawyers.
00:25:21 [Speaker Changed] Make it go away. Absolutely.
00:25:22 [Speaker Changed] Exactly. That’s called a nuisance value settlement. And so theoretically the less money you can invest in each claim, the higher the likelihood of success. And if you were to invest $1, you would, you would win every single litigation because
00:25:35 [Speaker Changed] You would always take the $10,000 check to go away. That’s a great ROI. Exactly. In reality, you have a, a plaintiff that doesn’t wanna settle for 10 grand. Right. Right. They feel they’re wronged once it gets, you know, people forget 90 something percent of cases settle right before trial. So one question I have to ask you is when you’re doing litigation financing of the cases that that are resolved Yeah. How many of them actually go to trial and how many of them are resolved way before trial?
00:26:07 [Speaker Changed] The majority of them are settled. Huh. And litigation finance, I have to admit, does introduce a hurdle beyond which the plaintiff has to hit in order to settle for a, a reasonable amount and make a reasonable amount of money. So that’s the reason why in litigation finance, you don’t see settlement rates that are as high as you would normally see. The plus side of this is that normally a lot of plaintiffs run out of money and then they settle the case for pennies on the dollar. Right. And so litigation finance allows them to hold out for what they’re owed.
00:26:40 [Speaker Changed] I, I would think it’s a self-selecting group in two, two ways. One is people who know in advance, I’m giving up some of my upside, but I want to go the distance. And, and two, because they’re funded, they don’t have to take a low ball settlement. They could, I would imagine the defense side, oh, they have a deep pocket supporting them, we’re gonna have to be prepared to go to court. It changes the dynamics of the subsequent settlement discussions. I would imagine it makes the defendant a whole lot more serious about the case than we could just wait this guy out and eventually they’ll run outta cash.
00:27:19 [Speaker Changed] Exactly. Exactly. Now the secret about the defense side is that it’s often in their best interest to draw out the litigation process. One, because the plaintiff might run out of money. And two, just because if I’m owed $10 million in an earnout, it benefits the defendant to pay that to me in five years rather than today. Right. Even if they settle for the full amount. So that’s why a lot of defendants, especially big companies, will weaponize the fact that they have deep pockets can pay for lawyers, can drag things out and you know, what’s the plaintiff gonna do, sue them in court and take five years to do so. And so that’s why you might see cases where both sides recognize the plaintiff is at least entitled to something, but where the defendant just hasn’t settled because it’s in their economic best interest to drag it out.
00:28:09 [Speaker Changed] Huh, interesting. So given three quarters, 75% success rate, what sort of returns are you targeting? I know we can’t talk about actual performance, but when you’re looking at an individual case, one would have to think the average of the cases are looking for x percent a year. Is it 15%? Is it 20%? The winners have to offset the losers. So I gotta think you’re looking for way more than 10%, right?
00:28:38 [Speaker Changed] That’s right. So we usually charge a significant multiple on our dollars put out and across the fund we target a 20 to 25% net. So we’re trying to be comparable to private equity, but in half the duration and uncorrelated of course.
00:28:56 [Speaker Changed] Hmm. So litigation finance is the flagship strategy. What other strategies do you employ?
00:29:02 [Speaker Changed] So litigation finance is by far our largest strategy, but we also have a couple hundred million in a type of distressed lending in bankruptcy called DIP lending. And we also have a couple hundred million in a type of alternative credit called government receivables. So government receivables is where you have a 90 to 120 day receivable from a federal or state government entity, either because of a grant or a contract that you performed on or a credit of some sort. And we advance against that and then get paid directly by the government.
00:29:36 [Speaker Changed] I just had a conversation with a, a friend who does that sort of work for state and county governments and the, the problem they run into is when they’re too successful, when they have all this, these accounts receivable to them it’s like, Hey, we have too much business, how do we fund this? And it seems like it’s pretty guaranteed. I didn’t realize that sort of alt credit was something you do. How large of a receivable are you looking at? I’m assuming you’re not doing this for five and $10,000 at a pop. Right. It’s probably millions of dollars if not more.
00:30:12 [Speaker Changed] Right. So the individual receivables can be as low as 10 20,000. Oh really? But we usually set them up as credit facilities with people who generate lots of these receivables. And the facilities might be a couple million. And the reason why we’re able to find these businesses is because, and you’ll notice everything we do is related to either the legal system, the judicial system, or the government in some way. Because what our technology does best, and we call our technology the truffle sniffer as in like a, a pig that goes into the forest and then finds valuable truffles, is we crawl through these comprehensive government databases and pull out the information that is relevant for investment purposes and go after those deals specifically. So in litigation we’re looking for cases that win in government receivables. We’re looking for businesses that are owed receivables and are likely to be in financial need of receivable financing. So Boeing for instance, would be excluded even though they generate billions, a huge amount of receivables. And I would love to fund Boeing, but Boeing would never want funding from us. So it is what it’s,
00:31:16 [Speaker Changed] Huh, that’s really, that’s really interesting. And you mentioned dip or debtor in possession financing. Yes. So in a bankruptcy, the debtor takes control of the entity and, and suddenly they’re operating on behalf of all the other creditors. And that requires a line of capital as well.
00:31:34 [Speaker Changed] So most large bankruptcies are called pre-packaged bankruptcy. So there’s already a dip lender in place. What we specialize in is looking for these subscale dip opportunities where there is no pre-petition lender that’s willing to put up the DIP financing. And so you can come in and be a priming lien on all the assets of the bankruptcy.
00:31:57 [Speaker Changed] And we briefly discussed competitors, but it sounds like it’s deep pocketed, high net worth individuals and some multi-Strat funds that sort of do this on the side. Is anybody else focusing on this sort of strategy directly or for now, do you pretty much own the space?
00:32:18 [Speaker Changed] So we did not invent any of the asset classes that we are in. However we approach what we do in a very unusual way and a lot of our LPs see that. So the reason that we even came up with a government receivable strategy, which is, you know, a liquid hedge fund, it’s got a much shorter duration than we’re used to. It’s a different type of database is because one of our LPs, a university endowment approached us and said, Hey look, I’ve got this other manager, they do government receivables financing. I freaking love this asset class and I want more of it. But they’re not able to source more because they’re using their relationships to source. You’re
00:32:56 [Speaker Changed] Scraping it right off the sites. That gives you a huge edge.
00:32:59 [Speaker Changed] Exactly. Yeah. So we don’t need to go to people we know and say, Hey, is there any chance you want financing? We can actually go into the government contract websites and say, okay, who here looks like they would need government receivables financing?
00:33:13 [Speaker Changed] So everything you’ve described so far is both technologically driven and outside of what we think of as traditional finance or even right alt finance. I don’t wanna use the phrase niche, but I gotta ask, how far can this scale up? Like this is not gonna be a trillion dollar business ever.
Right? Even if you attract thousands of competitors, you, you’re coming up on a billion dollars. Is there room in the space for 10 billion or 20 billion or is there just not enough juice to make it worth a squeeze there?
00:33:50 [Speaker Changed] So each one of our strategies individually is capacity constrained. And you can see this by the fact that the industries that they are in are not that large. So the largest government receivables funder has 2 billion of assets under management. The largest litigation funder has a couple billion of assets under management. They are kind of what they are. But we see our firm as a tech driven alternative credit firm. And the types of alternative credit there are out there is huge. Right.
00:34:20 [Speaker Changed] That’s a trillion dollar industry clearly. But you’re, you’ve found an area that is the, the fishing hole you’re, you’re operating in is relatively small as compo compared to, let’s call it middle market funding of right. Of existing companies. So the other thing I find so fascinating, so you’ve diversified across three different lines. So it’s debt in possession financing, accounts receivable, and then litigation finance. But all of this sounds completely uncorrelated to the economy, to the stock market, to interest rates. What’s the relationship of the fund’s success rate versus all the other things we look at as either correlated or uncorrelated.
00:35:07 [Speaker Changed] So that is the niche that we occupy for our LPs. They have a lot of things that are market correlated and depending on their liquidity and return profile that they’re looking for, they might invest in litigation finance, which is longer duration. It’s a kind of a five to seven year drawdown fund. Or if they’re really looking for liquidity but are willing to do a lower return profile, they might look for something like government receivables, which has quarterly redemptions but is more of a 10 to 12% net and then dip is somewhere in the middle. So across all of our strategies, I think the non- correlated component is a super important part of both how we market and the value that we provide for our investors.
00:35:50 [Speaker Changed] Huh. So some people want liquidity, they’re gonna do accounts receivable if a big endowment or foundation is less concerned about regular demands on capital or future liabilities. If you’re doing the flagship litigation finance expect to be locked up seven years. Fair statement.
00:36:08 [Speaker Changed] Five to seven years. That’s
00:36:09 [Speaker Changed] To seven years. Yeah. Really interesting. I gotta ask about the name. Where did the name Legalists come from?
00:36:17 [Speaker Changed] I think that it was related to our very, very original business idea, which was a list of attorneys and a list of cases.
00:36:26 [Speaker Changed] Legal list.
00:36:27 [Speaker Changed] That’s right.
00:36:28 [Speaker Changed] So back in white Combinator when you were just scraping this and saying, we don’t know what the hell we’re gonna do with this, but here’s a list of attorneys and cases. Exactly. Exactly. Huh. But you just kept it for, for nostalgia’s sake.
00:36:39 [Speaker Changed] I do, I do identify as a legalist. I’m very big on rule of law.
00:36:43 [Speaker Changed] Yeah. Some, some people less so. Right. Say that. So let’s talk a little bit about the asset growth, which has been pretty amazing. You, you start with 10 million in 2017 by 2021 that’s under half a billion now you’re knocking at a billion. That’s pretty rapid growth for a a startup. Most startup alt credit funds or alt hedge funds don’t scale up to a billion dollars that quickly.
00:37:15 [Speaker Changed] I think that’s right. I think we happened to be at a very good moment in time where a lot of our investors are people who were already familiar with litigation finance but happened to not like how it was being done before. So the big problem with litigation finance traditionally as an industry is that each litigation itself carries a ton of idiosyncratic risk. You could have the best case in the world and get in front of a judge and the judge is feeling kind of crotchety that day. And so then he dismisses it and then you’re done. And what our strategy does is our strategy takes the idiosyncratic risk out of each individual investment out by pool it with hundreds of other investments. And there were no other litigation funders. There are no other litigation funders that do it the way that we do. Huh.
00:38:03 [Speaker Changed] Real really interesting. Well, you’re out if the judge dismisses it unless there’s an appeal. Do you guys fund appeals?
00:38:11 [Speaker Changed] We don’t fund appeals for cases that have lost. We have funding.
00:38:16 [Speaker Changed] Well, would you fund, would you fund an appeal for cases that one, not because you’re challenging the outcome but you’re challenging the dollar amount. The award, not the verdict.
00:38:27 [Speaker Changed] So the qualifier for the truffle sniffer is based on a set of variables that include static variables. So these are things that would eliminate a case categorically or qualify a case categorically. And then there are also time series variables. So the time series variables are related to things that happen in the case. And this is not at all obvious to detect and this is what our machine learning is trained on, but we are looking for signs that a case is going really well for certain types of cases. Getting a preliminary injunction might be a really big deal for other types of cases like patent cases for instance, 50% of patent judgments are overturned on appeal even if they win. Wow. So for that reason, we don’t do any patent cases ’cause there is really no stage at which we could fund it where it has been de-risked. And we’re really looking for preliminary motion hurdles that de-risk a case.
00:39:23 [Speaker Changed] Huh. So the future is inherently unpredictable, but by controlling a handful of variables, you can narrow the range of potential outcomes to something manageable.
00:39:34 [Speaker Changed] Exactly. And what then our underwriters do, and there is still a big human lawyer underwriting component for the simple reason that, you know, if you look at a case, there are three elements to underwriting it. There’s will it win, how much will it win? And if they do win, can the defendant even pay it? And the latter two are really what we still need a lawyer to check for. So a lot of what the lawyers check for is, does it actually make sense for this guy to get this amount of money? And we call this the no policy
00:40:08 [Speaker Changed] Good policy in just about every endeavor of life.
00:40:11 [Speaker Changed] Yeah. But what we found is that people put out energy into the world and then it is reflected back to them. And so when we’ve had situations where we’ve just, we’re just like, did you really hate that guy? I really hated that guy. And he’s got such a technically good case on paper and we’ve had a handful of losses that have had this fact pattern. But once they get to trial, the judge is like, oh, I can see why you terminated that contract. Right. Can see why you didn’t wanna work with him. Right. And then they inevitably lose and the jury will drape the law over whichever party they feel like is more deserving because we all have a sense of inherent right and wrong in our hearts and we wanna act according to that.
00:40:54 [Speaker Changed] It’s always funny when you, when when you come to the realization, Hey, there’s 8 billion people in the world, even if 1% of them are, let’s use the word jerks instead of the a word that, that that’s still, you know, a ton of people. That’s still, if there’s 8 billion people, well well guess what? It’s 80 million PE jerks out there. I don’t, I don’t need to deal with them. So anyway, I I, I totally get that rule of thumb and it, it works well. But since we’re talking about this sort of squishy individual personal things, you mentioned many of the multi-Strat funds that do these sort of deals. They have a network of people, it’s sort of who knows who and how they, they come across these cases and one person refers it to another person and that lawyer refers it to a third person. Your approach to originating these things are completely different. You’re pulling the data off of, I’m now gonna assume it’s just about every state in the country that’s right off off of the judicial websites of the states. And then you are running your analytics on it to say, Hey, let’s see if we can find a case that’s worthy. And at that point, take us through the process of reaching out to that plaintiff. How, how does that conversation go? Hey, we saw your case. We’re wondering if you need assistance on financing it.
00:42:22 [Speaker Changed] So even though we fund the plaintiffs, the attorneys are usually our primary points of contact because attorneys are repeat players. And so at this point, you know, our team has 5,000 calls with attorneys every single year. And at this point we’ve spoken to tens of thousands of attorneys. Pretty much everyone that does the type of case that we’d like to do. When we first started out, it was all cold outreach, but these days it’s a lot more, Hey, I saw that your ex case just survived motion for summary judgment. Congratulations. Do you wanna reconnect in a couple weeks? Even though I know we just talked, you know, six months ago. Huh. So it’s a lot more of these warm connections. And it’s not that we are not bullish on relationships. It’s that I think that when you have a solely relationship driven origination approach, you’re really limiting the number of deals that you can
00:43:16 [Speaker Changed] Do. You, you’re relying too much on serendipity as opposed, opposed to something that is not only quantitative but structured and, and rules driven. Right. It it gives you a more consistent thing. So you mentioned no patent cases, right. What are the sort of commercial cases that you very much like? What, what catches your eye?
00:43:34 [Speaker Changed] So two thirds of our cases are breach of contract and business torts. Do you know what business torts are?
00:43:39 [Speaker Changed] Sure, of course.
00:43:39 [Speaker Changed] So breach of
00:43:40 [Speaker Changed] I all, I didn’t do your route. I went to law school, so Oh, you went to law school? That’s right. So I I I kind of, yeah, I know what business torts are. That’s why, which which is part of the reason why I’m in finance. Yeah. ’cause I found that stuff kind of not nearly as interesting as finances.
00:43:58 [Speaker Changed] It does make me a lot more aware of all the things that could go wrong when you do business with people. It’s like no matter what industry it is, we’ve had several cases with indoor trampoline companies. Right. I I was really shocked when the second indoor trampoline company dispute came my way. I was like, how many indoor trampoline companies are there anyways?
00:44:23 [Speaker Changed] Me meaning like where kids go to play Yes. Or companies that manufacture ’em and sell them. Yes. Because the ones where kids go to play, even if you’re like padding everything, it still looks like a litigation nightmare.
00:44:35 [Speaker Changed] These are contract disputes between franchisees, franchisors, distributors, things like that. But no matter what type of company it is, whether it’s a trucking company, a software company, an entertainment company, there are only so many types of disputes. It’s like you don’t honor your contract. Right. You steal someone’s money, you steal their employees, you steal their trade secrets, you take the business opportunity that you were meant to do together and then do it yourself. And it makes you realize that humans act extremely consistently Yeah. No matter what industry they’re in.
00:45:07 [Speaker Changed] That’s right. The interesting thing you raised about franchises, I I’ve noticed, and it kind of waxes and wanes over time, but there’s a regular series of litigation between franchisees and Burger King or McDonald’s or whoever the franchisor is. Have you looked at those sorts of cases? That seems to be something that pops up pretty regularly.
00:45:33 [Speaker Changed] It’s not common for us to fund franchisee franchisor cases. This is getting,
00:45:38 [Speaker Changed] There’s enough upside
00:45:38 [Speaker Changed] Really detailed because the franchisee franchisor agreements are written in a pretty airtight way. Yeah,
00:45:45 [Speaker Changed] No, they, the McDonald’s is as, as slick and tight as you can possibly get and how much upside is there. Right. The what made me think of this is I just saw a bunch of franchisees or an up in arms over the possible reintroduction of the $5 value meal, which McDonald’s wants to do, and somebody claimed it’s violation of their franchise agreement. I’m like, I gotta think McDonald’s is savvier than that. Like, if they want to introduce the $5 value meal, you’re, you’re gonna, you’re gonna have to eat it. You know, it’s, it’s, even if it’s a, if it’s a break even or a loss, they’re doing it to bring bodies into the store. And I have to imagine it’s covered in the franchise agreement.
00:46:26 [Speaker Changed] Another commonly misunderstood litigation is the McDonald’s coffee litigation. Did you hear about that?
00:46:32 [Speaker Changed] Oh God. That, that’s a infamous one, which anti anti lawyery people talk about all the time. But when you read the facts of the case, right, this woman was badly scalded. Right. The coffee was 30 degrees hotter than the typical Right. Takeout coffee, they screwed up. Right. They didn’t have the top on. I mean, there’s talk about the wrong hill to die on. If you’re against litigation as a way to solve some societal problems, that’s not the case you want to use.
00:47:02 [Speaker Changed] Right, right. I think that litigation is frequently misunderstood in that way. Most people do not want to be in litigation. It’s not a fun place to be in. No. Which is where you see, which is why you see so few lawyers act as plaintiffs themselves in litigation because it’s just not very fun. It kind of eats you from the inside emotionally.
00:47:22 [Speaker Changed] It’s draining, it’s emotionally difficult. And you know, I always see people threatening litigation and it’s like, Hey, if you wanna sue Sue, right. Don’t, don’t wave a gun around. Right. Use it. Don’t threaten to use it. Right. And, and that’s what litigation seems to be. Anyone who threatens litigation usually isn’t serious. Right. Let me know when you’ve hired an attorney and you filed a summary, you know, a a a a motion and complaint and then we can have a conversation about how serious you are.
00:47:46 [Speaker Changed] Right. The reason that litigation happens is because of a gap in expectations between the plaintiff and the defendant. So the closer the gap is, the more likely it is to settle quickly. And then the wider the gap is whether one side is unreasonable or the other, the more likely it is to drag on and actually go to trial. And we see this even with going back to the earnout example, even with a pretty clear cut earnout example, because it might have stages to it. So you might get 1 million if you hit this milestone 2 million if you hit this milestone. And even if everyone agrees that it’s somewhere between five and 10 million, they’ll still litigate over whether it’s five or whether it’s meant to be 10.
00:48:27 [Speaker Changed] The, the assumption is everybody is operating in good faith and once that good faith disappears, then whatever the opposing party is doing is red in a negative light and it just gets further and further apart. Yeah. Not a big, not a big surprise. So given how tech oriented you are, how much time and effort do you spend building out the tech, continuing to expand it, making it just beefier than it was? How much innovation can there be in terms of scraping state judicial or federal judicial websites?
00:49:06 [Speaker Changed] So there are two ways in which we Im can improve the technology. One is adding more data sources. For instance, you know, adding our government receivable strategy, it was so many new government websites that had to be scraped. And then the second way is improving our existing process. And I don’t know if you’ve heard about the advent of generative ai, but it has been kind of a game changer for us and for a lot of legal tech companies because now we’re not just able to analyze the, the docket, but we’re actually able to analyze the rulings themselves and figure out what we like about them before we reach out to
00:49:45 [Speaker Changed] Attorney. So you’re looking at rulings attorneys are, are you looking at motion papers also to see the strength of either either side’s argument? Is that something else you’re looking at?
00:49:55 [Speaker Changed] We usually analyze the orders themselves. So when a order comes down, we can see exactly how many counts were denied and how many counts were accepted. And that will influence whether we reach out and when we reach out and what we say when we do reach out.
00:50:11 [Speaker Changed] Really interesting. So, so we’re talking about scraping data off of websites in, in the world of, of economics, I could go to Fred or I could go to BLS or, or BEA and I could just download an Excel spreadsheet of all the historical data. Do the states not make that sort of data available for anybody who wants it? Does it require this complex scraping process?
00:50:39 [Speaker Changed] So everything that the government does has to be publicly accessible, but it doesn’t mean that it has to be easy to access, which is a completely different standard. And so many of these state court websites are extremely difficult to access. They are updated every day with new filings. But it doesn’t mean that you can just go in and download A CSV. I mean, if we could, that would make our lives so much easier,
00:51:05 [Speaker Changed] Although it would make it easier for people to come in and compete with you.
00:51:08 [Speaker Changed] True. That’s also true.
00:51:09 [Speaker Changed] That’s also true. Do you ever get pushback from states, Hey, why are you spending so much time on our servers? We’ve noticed that 80% of our traffic was you last week. What sort of pushback do you get from individual state websites?
00:51:23 [Speaker Changed] So that was the problem that Christian ran into at Harvard back in the day. And it was because we were newbies at it. And when you actually do it for a long time, you learn to moderate your traffic. Right. And only go to the pages that you need to go to. Right.
00:51:36 [Speaker Changed] I’m assuming you could do that at night. You could do it when it’s less, less trafficked. You, you could show up in a way that isn’t taxing to them.
00:51:44 [Speaker Changed] We’re trying to build a sustainable business here, not take down a a state server. Right.
00:51:50 [Speaker Changed] Easy enough. So out of all of these cases that you’ve done over the years, and now you’re on your fourth fund, is that right? Fourth or
00:51:59 [Speaker Changed] Fourth? That’s right. We’re launching our fourth fund later this year.
00:52:02 [Speaker Changed] So what’s the biggest takeaway from the process that you’ve learned? Like having done this for nearly a decade, how are you looking at this practice of alt credit? What’s the big lesson you’ve learned in building the funds since 2017?
00:52:22 [Speaker Changed] So I think that people overcomplicate finance, I’ve learned that if I can’t understand someone after having it explained to me once or twice, then it probably doesn’t make sense. And they’re just pretending to understand it. So, so I mean the, the underlying fact of credit or finance or any kind of investing is I give you a certain amount of money and you give it back to me if X, Y, z and you have to understand under what circumstances you get it back and how you get it back. And you have to understand under what circumstances you disperse and how you disperse. And then you try to minimize the gap in time and maximize the difference between what you put out and what you get back. It’s really not that complicated. But I think that modern finance has had so many smart people try and overcomplicate it that they’ve obscured that very simple fact.
00:53:15 [Speaker Changed] So, so I’m gonna give you a a little pushback on that. I think complexity is a feature, not a bug, and it’s done by, by people within a particular industry. That’s what jargon is because they’re trying to prevent people from understanding ’em. Oh, and you’re not gonna pay for a consultant or an expert if it’s simple, but look how complex it is. Write me a big check and I’ll explain it to you or I’ll explain it to whoever you want me to explain it to. It seems, I, I completely agree with you, but a lot of what I see that’s complex.
00:53:51 [Speaker Changed] It’s intentional.
00:53:52 [Speaker Changed] You have to look at the incentive, the incentive to make things simple and understandable versus the incentive for them to be complex and the amount of fees that can be charged on that.
00:54:04 [Speaker Changed] My other pet theory about finance is that there are many ways to make money, but most of them have markets associated. And so anytime there’s a market, the purpose of a market is to compete out all the alpha. And so what people are saying is usually I’m smarter than everyone else in the market. And that goes against the fundamental efficient market hypothesis. Right. And so where you should try to be instead is the area where there hasn’t been a market formed yet. You should try to be at the place where there isn’t a sale and then try to force them into a sale rather than going to the auction house and assuming that you’re buying the art for the right price.
00:54:43 [Speaker Changed] Right. When, when you’re buying in a deep, broad market, you would assume Yeah. That you’re gonna get something close to fair value. Right? It’s not gonna be, if it’s too much over fair value, well people aren’t gonna buy it. Right. And if it’s too much under fail value, it’ll attract enough competition that’ll eventually inefficiencies get arbitraged out of the market. So let me throw you one curve ball before we get to our, our favorite questions and I’m, I’m kind of fascinated by this. So you, you publish essays kind of regularly at a silicone valet. And, and one of the questions I found, one of the essays I found that was so interesting is I woke up and I found that the Harvard registrars has finally shut down my@harvard.edu email address. And even though you dropped out in 2016, you kept promising yourself, Hey, I’d be back on campus in the fall. Was that a little bittersweet, Lou losing your undergraduate email address? Because I know people at other schools like Wharton and Yale, they graduate, they keep that email address for their whole lives.
00:55:55 [Speaker Changed] So the interesting thing about my life has been that I kind of grew up with the company. So when I started the company I was 20 and I was basically just out of my parents’ house. And these days I have my own house and I have a one-year-old baby. And last fall I made Thanksgiving dinner for the first time. And a lot of what I think about when I think about leaving Harvard is that it’s really like gazing back at your own youth. And so you feel a lot of nostalgia for the person that you used to be and how different you are from them. And along the way, you know, I poured those years into the company and grew it to where it is today. So I think that’s really what that essay is reflecting.
00:56:45 [Speaker Changed] All right. Let’s jump to our speed round. Our favorite questions we ask all our guests, starting with tell us what you’re streaming these days. What are you watching or listening to that’s keeping you entertained?
00:56:56 [Speaker Changed] So I’m a big fan of Morgan Housel’s podcast where he talks about the psychology of money. It’s very rare to find someone who’s deeply philosophical, but also interested in finance. And his podcast is the perfect intersection of that.
00:57:12 [Speaker Changed] Let’s talk about your mentors who helped to shape your career.
00:57:17 [Speaker Changed] I’m going to have to say our old general counsel, Curtis, who shaped everything that Christian and I know about litigation and also made us lawyers
00:57:27 [Speaker Changed] Like it. Let’s talk about books. What are some of your favorites and what are you reading right now?
00:57:32 [Speaker Changed] Oh, okay. So there are two people who have worked in finance who have written actual literary works. One is Gary Cervi, who wrote The Counting House, and I’ve got a copy for you today. And then the second is this guy named Amor Towels, who worked at an investment bank for 20 years and then switched completely to writing fiction. And so what I like about his stuff is that most literary authors have only ever been authors. And when you’re an author, you are coming from a place of passivity where you’re not actually an actor in the world, you have no ability to change the world, you’re just observing it. But because a Mor Towels has been in business for so long, he writes characters that are extremely proactive and optimistic and have such a good attitude that they’re able to shape the world around them. So his most famous one is called A Gentleman in Moscow. Oh, of course. Where, yeah, the main character is literally trapped in a hotel in revolutionary Russia, but he manages to create a life there, which shows that you can, you can change your environment no matter what your environment is.
00:58:36 [Speaker Changed] You know, I used to think all of the Michael Lewis books that were so interesting were, because he spent years in finance. He was at Solomon Brothers. Yes. So Liars Poker and The Big Short. Yeah. But then you start to see his other books like Moneyball or The Blind Side, or the Pandemic Book Premonition. And he has no experience in those spaces. He’s just like an incredibly talented writer. Yeah. But, but that’s really a, a, an interesting set of observations. The guy who wrote Gentleman in Moscow, what, what are some of the other books he’s written that you’re you like?
00:59:17 [Speaker Changed] He has one that he just published called Table For Two. And then my favorite of his is a short story called You Have Arrived at Your Destination. And the short story is about this idea that if you were to be able to project the lives of your children, it would be in three acts like a play. So in the first act, you have youthful optimism where you have all these hopes and dreams, and the world is opening itself up to you. But then you have the second act where you experience a setback, and he calls the second act setback coming to terms with their own limitations. And at this point, a lot of people just retreat or they give up. But then if you’re able to kind of accept who you are, you can move into the third phase, which is a place where you can be a better person and live a deeper and richer life.
01:00:04 [Speaker Changed] I can’t argue with that. That sounds pretty, pretty accurate. Our final two questions, some of which I’m, I’m really curious to see your answers. So what sort of advice would you give I, I shouldn’t even say, reach recent college grads, somebody in college who is interested in a career in alt credit or hedge funds or finance. How would you advise them?
01:00:29 [Speaker Changed] So my own trajectory has been a little bit unusual. And I think that most people assume that finance is an apprenticeship business where you can only learn by studying with someone who has already done it. But I think that coming from that perspective means that you’re always gonna do it the way that that people did it before. And we’ve always had this advantage from being able to examine everything from first principles. So I guess my advice would be that people should not be afraid to deviate from that traditional lockstep path.
01:01:03 [Speaker Changed] And our final question, what do you know about the world of litigation finance, data scraping, investing alt credit today? You wish you knew back in 2016 when you were first thinking about launching the business?
01:01:19 [Speaker Changed] Back then, I really didn’t know anything. So being young is like having a flashlight that only shines what and step ahead of you and no further.
01:01:28 [Speaker Changed] That’s very interesting. And
01:01:30 [Speaker Changed] I don’t think that there’s anything that I could’ve told myself that I would’ve had the context to understand.
01:01:35 [Speaker Changed] So it’s really the journey, the process that you, you learn along the way. Even had you started with what you know today, it doesn’t sound like you think it would’ve been on any use.
01:01:46 [Speaker Changed] Yeah. So land, Samantha Chang has this quote where she says, if I could change anything about my life, I would not have been so unhappy when I was young.
01:01:57 [Speaker Changed] You’re so focused on the future, you sometimes forget to enjoy the moment.
01:02:01 [Speaker Changed] Exactly.
01:02:02 [Speaker Changed] And, and that is very true for a lot of young people, especially in hyper competitive fields, right? No doubt about it. Well, Eva, this has been absolutely fascinating. We have been speaking with Eva Shang. She is the co-founder, CEO, and general partner at Legalist. If you enjoy this conversation, well check out any of the past 500 discussions we’ve had over the previous July. It’ll be 10 years. You can find those at iTunes, Spotify, YouTube, wherever you find your favorite podcast. Be sure and check out my new podcast at the Money short, 10 minute conversations with experts about topics that affect your cash, earning it, spending it, and most importantly, investing it. You can find those in the Masters in Business Feed, or wherever you find your favorite podcasts. I would be remiss if I did not thank the crack team that helps us put these conversations together each week. Sage Bauman is my head of podcasts at Bloomberg. Sarah Livesey is my audio engineer Atika, my project manager, Anna Luke is my producer, Sean Russo, my researcher.
I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.
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