“The first thing we do, let’s kill all the lawyers” – William Shakespeare, Henry VI Part 2, Act IV.
Lawyers don’t get much respect, whether it’s from Shakespeare or the field of finance.
For starters, you already have a few things working in your favour:
You already have an understanding of how the corporate works, what you’ll have to put up with, and how to deal with psychopaths all day, every day.
You’ve hopefully also started work or done an internship with a prestigious law firm that everybody knows about. Because that will give you access to important networking opportunities through clients, former clients, and even partners or ex-partners at your firm (obviously, discretion is required).
But of course, expect some hiccups too
While it is possible to get into fields of finance, it can be tough if there is no overlap with your existing skills sets. For example, law graduates may have a better shot at moving into real estate finance or plain-vanilla M&A, compared to areas involving private equity, hedge funds management or venture capital.
However, at the end of the day, whether or not a new career in finance is a viable option would very much depend on your background, characteristics, beliefs, as well as those of the firm you are targeting.
Dennis Wong, a former legal aspirant turned venture capital analyst at Golden Equator Capital (GEC), shares his real-life experience on how to break into finance with a background in law.
- Love for language led to study of law
For the strapping 26-year-old, it was his proclivity for the arts that first got him interested in the study of law.
“I thought law would be a good fit for me because I have always liked languages, history, literature, and I’ve always been interested in how the legal system works. It was partly also because it was seen as cool and prestigious being in law.”
However, his internship stints in litigation quickly demolished whatever expectations the Monash University graduate had held on the practice.
- A case of “expectation vs. reality”
Despite the glitz and glamour commonly associated with the profession, Wong admits that the gruelling hours and lack of ownership over this work quickly left him feeling jaded and uninspired.
“In litigation law, it is not uncommon for lawyers to be working till the wee hours. Many of my peers literally work till 4am on a daily basis, go home to take a shower, get an hour’s sleep, and be back at the office by 6am to prepare for court at 9am.
“They would then spend the whole day in court till 5pm, get back to the office, and the whole cycle begins again,” Wong said.
The intellectual zeal that first drew him to study law was also starting to wear off amid the repetitive humdrum of legal research, document-drafting and court proceedings.
“I had to do a lot of legwork, but it was hard to see how all of that was getting translated into the larger scheme of things. Plus, in that area, information dissemination can be poor and you don’t get much direction.
“So, I was basically just following instructions and hoping to add value,” he said.
- Accidental foray into VC fund management
“After two internships in litigation law, I figured that law might not be for me and I wanted to do something finance-related,” said Wong, who fortunately, has a double degree in law and in business (banking and finance).
“In 2014, I was introduced to GEC by a friend. Coincidentally, they were located in the same building as the law firm that I was doing my internship at,” he shared.
“I did not know much about what venture capital (VC) firms did at that time, but I managed to score an interview with the firm, and was quickly fascinated enough to take up an internship.”
Wong was immediately immersed in the vibrant and fast-moving world of VCs, where he found himself analysing potential investments, reviewing performance levels of investments and carrying out due diligence processes.
“The nature of my work was very super hands-on, and so I could see the result of what I was doing almost immediately. You work intensively on a deal, you make recommendations, you regularly speak to founders and clients.
“You’re also the one who sees through the entire process – from the start, through signing and beyond – that’s the most exciting part of the VC experience for me, to be in the heart of the process,” Wong enthused.
And he never looked back. He took on a full-time position at the firm shortly after his internship ended.
- A keen eye for start-up potential
So, what does a VC fund manager actually do?
“The most basic thing, I suppose is to review potential investments and companies to see if they’re good or investable,” he said.
“The start-up scene is very hot right now and everyone is trying to do something that is incrementally better than everybody else. Maybe someone wants to be the new Uber for this, or the Grab for that.
“So, the number one thing I do is first look at is the product – is it really filling a need? Is there really demand for this product or are they just capitalising on the start-up trend?” Wong said.
He elaborated on the need to look for a product that is also “defensible”. “It’s very easy to create a software for instance, but what makes your business defensible? Can someone just come in and copy it and replicate your business? If so, then you don’t have a defensible business.
Importantly, you need to look at the founders and their background, he advised. “Do they have necessary expertise in the area? Because this will tie back to the first point.
“Do they understand the problem? Do they have the right connections in the industry? At the same time, you need to assess if you can click with the founders and whether you trust them,” he shared.
- Helping start-ups stand out & flourish amid growing competition
Once we’ve reviewed a start-up and decide that they fit into our portfolio, we invest in them. That’s when the real work really begins, Wong explained.
He added: “Early-stage companies require a lot of guidance and monitoring, so you really need to follow them through the process to help along to grow and of course, to protect our investments at the same time.”
When he isn’t busy monitoring or follow-up on portfolio companies post-investment, Wong spends his time networking with other start-ups and investors.
“A lot of deals actually come from our partners and other VC firms we have worked with and we meet them a lot at events or conferences. They could be making recommendations or we could be pitching our deals. It’s a whole ecosystem,” Wong said.
An avid sportsman, Wong, who represented Singapore in floorball at the 2008 Asia-Pacific Championships, enjoys playing futsal in his spare time.
- What does it take to be in VC fund management?
The first thing that companies will ask a potential candidate is: “What value will you bring?” he said.
“For me, it was in the legal aspects of things. I’m not a legal professional or a lawyer. But I studied law and I do understand the practice, so I can apply it to my work. So, when it comes to things like closing term sheets and shareholder investment agreements, I can review them very quickly, draft them, and make quick amendments where necessary.
“For instance, an investment agreement can span 30 to 40 pages, so you’ll be constantly calling your lawyer to clarify terms. Even small adjustments here and there can easily cost you up to S$10,000 per document and it takes time. I can do it in a day and at no cost, if there’s not a lot of changes required.
“So, that was the immediate value I could deliver. I could do all the stuff that saves the company time and money. Of course, having a degree in business also helps and I quickly picked things up from my internship.”
Ultimately, Wong shared that the role of a VC fund manager involves both IQ and EQ.
“Obviously, the review and valuation part requires IQ. Beyond that, the role involves a lot of “front-facing” time, so you’ll need to be fairly comfortable talking to co-founders and investors.”
Under GEC, Wong been involved with valuating and developing a series of the firm’s portfolio companies, including Paktor, a location-based dating and networking app, award-winning social payments platform Fastacash, and more recently, VaultDragon, a clinic management system provider that helps clinics transition their operations onto cloud, providing solutions ranging from records digitisation to clinic management system.
“It’s my baby,” he enthused.
“We currently have about 60 (private) clinics and specialists on-board and we are looking to expand. Medical facilities know they eventually have to digitise, so we want to be the first to get that to them and be their partner.”