Tales From the Legal Tech Startup Community: Fundraising While Pregnant
Basha Rubin and Mirra Levitt, the co-founders of Priori Legal, managed to land a major tech incubator investment, but dealing with fundraising and pregnancy at the same time wasn't easy.
April 17, 2018 at 01:27 PM
5 minute read
When Basha Rubin and Mirra Levitt first decided they'd start actively fundraising from venture capitalists for Priori Legal, they weren't anticipating an easy road ahead. They both knew that legal technology companies don't usually fare well with the Bay Area tech venture capitalism community and that women-led businesses especially struggle with gender discrimination in fundraising.
They also didn't anticipate that they would both get pregnant right in the middle of their fundraising round. Somehow though, they made it work.
Rubin and Levitt originally met at Yale Law School, where they saw a lot of obvious legal business issues through the jobs and clinics they worked in: lack of staffing transparency, inability to compare quality of attorneys, inefficiency in using attorney time. They decided to make a run at a legal tech startup.
Rubin and Levitt started Priori as a platform meant to connect smaller businesses to legal counsel, but found that while their customers were usually happy and excited about their work, they couldn't find sustainable ways to scale the platform out.
Rubin was a little hesitant about bringing in investors early on. While venture capital can bring in cash to support business development, it also gives venture capitalists looking to bolster their potential return on investment a great deal of power in shaping the direction and scale of the companies they invest in.
“I was reticent to bring venture capital into the room before we had a clear path to scale, which enabled us to experiment with the business.” Rubin said. The company took a few years to work through its market and value proposition before bringing outside capital into the room and ultimately decided to shift away from its original target market, small and mid-sized businesses, and instead tailor the product towards corporate counsel.
“Moving into the corporate counsel space has been a fantastic decision,” she said. Corporate counsel plan their outside counsel budgets proactively, typically have more money to spend, and need to make more hiring decisions. They're seen in the legal market as drivers of innovation. The pivot allowed Rubin and Levitt to keep working towards the same structural issues they saw in the legal industry while employing a profitable business model.
Once they settled on a corporate counsel-focused product, Rubin and Levitt thought they had a product that deserved venture capital-level scaling, and decided to pursue the venture route. Shortly thereafter, they realized that they'd both inadvertently decided to start families at almost exactly the same time.
Rubin and Levitt both spent the last few months of their respective pregnancies in and out of meetings with venture capital associates. Rubin even took a meeting to pitch the platform from the hospital while she was in labor, because it had taken so long to schedule the meeting in the first place.
The period was not one that Rubin remembers particularly fondly. At this point, she can't say for sure what factors about their companies were toughest for investors to swallow. “Of course, it's hard not to wonder when you have not one, but two co-founders who are nine months pregnant why investors turn you down, as if legal technology is easy to raise money for in the first place! For the most part, I chose not give that logic too much credence,” she said.
“At a certain point, you never know. It was certainly unpleasant and uncomfortable, but both pregnancy and fundraising are unpleasant and uncomfortable in lots of ways, and I've never fundraised not pregnant, so I can't say with confidence that pregnancy exacerbated it,” she added.
Though the fundraising process was tough, Rubin and Levitt were well-backed by support staff. Despite the uncertainty of the process, none of their team jumped ship, allowing Rubin and Levitt to really focus on getting connected to potential funders.
“One of the advantages of not having had investors and planning a slower growth plan early on is that we experimented a lot with who fit and who did not fit in the team and how we can build a culture that was supportive and transparent,” Rubin said.
Rubin and Levitt eventually connected with Eve Burton, senior vice president of the Hearst Corp. and co-founder of technology incubator HearstLab, which works exclusively with women-led startups. Priori landed a partnership with the incubator, giving the company a new funding stream, office space within Hearst's legal services operation and a direct line to Burton herself, who also heads up global legal services for Hearst.
“HearstLab and Eve have already driven unquantifiable value beyond the money they invested in us: to be hosted by a general counsel's office, in terms of product testing, in terms of feature development, in terms of 'which of the following taglines resonate with you the most,' having them be very active Priori users and say, 'I got tripped up on this' or those sorts of things,” Rubin said.
Ultimately, Rubin thinks the decision to pursue venture money when they did worked well for the company. “Waiting paid off,” she said.
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