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It wasn’t easy for Jonathan Dickey to step across the courtroom and begin suing venture capital firms. The Gibson, Dunn & Crutcher partner has represented venture capitalists for years and didn’t take lightly the idea of having to go on the offensive. But in the past nine months, about a dozen of Dickey’s institutional clients that invest money in VC funds started complaining of substantial — and suspicious — VC fund investment losses. “My gut reaction is ‘let me take a look at the facts,’” Dickey said. “We don’t want to do these things lightly.” But after looking into the complaints, Dickey said he was ready to pursue the issues on behalf of some longtime clients. “In some of these cases, it’s pretty clear something more than just a market downturn has caused huge losses,” he said. So Dickey is pulling double duty these days, adding plaintiffs work to his defense practice. He’s representing several institutional clients that are arbitrating claims against VC funds and a handful of other clients that are considering filing similar claims against other venture firms. Dickey said he couldn’t divulge the names of his clients. He also declined to name the venture capital firms under scrutiny, but said they do not include any of the top-tier names in the business. “At the height of the market there was so much money chasing so few deals,” Dickey said, “the amount of care and thinking that went into throwing millions of dollars into fly-by-night companies was slim to none.” But it’s not just sour grapes on the part of the institutional investors, Dickey said. The losses that have become the topic of legal disputes involve conflicts of interest, nepotism and questionable reporting practices on the part of the venture capital investors, he said. The years of defending companies against the occasional financial fraud claim has helped Dickey in preparing his cases. “I usually have a good instinct of where the bones are buried,” he said. While on the defense, he said, “I know usually where I don’t want my adversary to go.” Once you have a grasp of how these investment entities are structured, Dickey added, “you can pretty much figure out how it’s structured and where the information is.” Still, Dickey isn’t celebrating his recent switch in client representation, and he stressed that plaintiffs work is not his new business model. “It’s not like we have chronic plaintiffs who we’ve represented for 20 years,” Dickey said. “It’s not repeat [plaintiffs] business.”

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