Turczyn: Passion, speed of startups makes for engaging work
Dealing with large, established companies which often have committees and layers of bureaucracy can often be a tedious affair.
Not so with startups, says Melissa Turczyn, an attorney who co-chairs the "Venture Best" team at the Michael Best & Friedrich law firm in Madison.
"They can't take weeks or months to make a decision like bigger companies do," said Turczyn, a 2007 UW-Madison law school graduate who primarily represents early-stage and emerging growth companies in a variety of industries, including IT, pharmaceutical, medical device, clean tech and mobile applications. She also represents venture capital, angel funds and other investors.
"So for me, it's a joy, an absolute passion, to work with these new companies because they move so fast," she said. "Everything is on a day-to-day and hour-to-hour basis because they have to make decisions quickly."
Turczyn said it's the entrepreneurs who make it fun for her to come to work.
"These guys guys and gals are energetic, they love their businesses and are super-passionate about their customers and what they are trying to do," she said.
Turczyn said she was pleased with the recent passage by an overwhelming bipartisan majority of legislation to invest $25 million in state dollars in early stage companies. The public money will go into a so-called "fund of funds" and will be matched with $50 million in private investment, plus another $5 million from the fund manager for a total of $80 million. The bill is now on the desk of Gov. Scott Walker, who is expected to sign it.
If the fund is successful, Turczyn said she hopes it will be expanded in several years. She also praised the Wisconsin Technology Council and others for educating legislators about the positive aspects of the measure.
"The hope is that this is the starting platform and not the finished product. But I think it is a step in the right direction and a great starting point."
She said hopes the fund will get startups more resources.
"Most of the capital in these firms comes from angel investors, high-net worth individuals and venture capital funds," she said.
Because the startups are riskier investments, she said banks typically shy away from them because they don't have an operating history or revenues.
"So there is nothing you have as an entrepreneur to show when you walk into a bank and say 'give me a loan because this is the potential I have.' Things just don't work that way."
Though this fund is smaller than a proposal that failed last year, she said it should help nascent firms "take it to the next step to prove out their product, get to revenue and get them on their way to being successful.
"The other thing it will hopefully do is keep some of our entrepreneurs here in Wisconsin because there is always the pull to go out to California," she said.
"A lot of the companies that we work with are in the IT space and they are literally kids in their 20s. To be able to incent some of them to stay here and grow their company in Wisconsin instead of getting that call and flying out to California is really going to be important."
Though Turczyn said she knew she wanted to be a lawyer when she was in grade school, she didn't get involved with startups until she joined Michael Best on a full-time basis in August of 2007.
"The type of attorney I wanted to be changed as I progressed through law school, but the goal never changed," she said.
"Some of my partners here had a decent amount of work in the startup space in all industries," she said. "They didn't have an associate to take the lead, but I had capacity at the time and it was really something I was fortunate to fall into. It's a great practice because I get to dabble in a lot of different areas as opposed to just solely focusing on one specific area of law."
She said she has been presented with many ideas that would make "fascinating companies," some of which succeed while others fail.
As much as she likes dealing with entrepreneurs, Turczyn said she's not sure if she would ever want to run a startup company.
"I think that entrepreneurs' brains work differently from a problem solving-perspective," she said.
"If I see a pothole in the road, for example, my instinct is to drive around it. But when entrepreneurs come to a pot hole, they put their foot down and say 'I can go no further until I fix this problem.' They try to solve problems differently.
"That's not to say I wouldn't do it, but it would have to be the right position. I don't know if I have the risk tolerance that a number of my clients do," she said.
Turczyn said her firm gets involved with nascent companies from the very early stages to help them figure out everything from structuring, protecting intellectual property and hiring employees, to deciding in which state they should incorporate.
She'll also do all the documentation to bring on investors. "Then the fun of my job really kicks in (because) these companies are so small that you get to operate as their general counsel. They may have employment or licensing or software copywriting issues."
And if she can't answer a question, she said she will put the entrepreneur in touch with someone in her firm who can.
"They filter their issues through me," she said. "But a big part of my job with first-time entrepreneurs is giving them a business understanding of what their issue is and how they should think about a problem. With a lot of these companies, there is not a right answer. So I try to give them the background or thoughts on both sides of the issue. Then they have to make the decision at the end of the day."
-- By Brian E. Clark
Listen to the interview with Turczyn