A lawyer, an investor, and a founder logged onto a Zoom call. It sounds like the opening of a joke. Instead, it’s part of the origin story of GCVC, a venture fund that wants lawyers to have a stake in the startups remaking their profession.
The firm came out of stealth on Tuesday with more than 50 general counsels investing their own personal capital, plus Wilson Sonsini as its first law firm backer.
Matt Holbreich, a former Fenwick lawyer turned investor, described the effort in Lincolnesque terms: “There’s never really been a venture capital fund of lawyers, by lawyers, for lawyers,” he said.
Investors poured $2 billion into startups building for the legal sector in the first half of the year, according to Crunchbase. Early breakout winners are now valued in the billions of dollars. Yet the lawyers who use this software are rarely in the rooms deciding which tools get funded.
GCVC is an attempt to change that. Holbreich founded the firm earlier this year with Erick Rabin, Bilt’s general counsel and chief compliance officer. Investors include the current and former general counsels of Salesforce, ElevenLabs, Whatnot, Ro, Circle, and Rippling.
Holbreich and Rabin declined to share the fund size, citing rules that prohibit investors from marketing a fundraise.
The pair is betting that the group’s collective pedigree — and closeness to the profession’s problems — will help the fund gain access to legal’s most exciting startups. Stilta was an early proof point.
Founder Oskar Block left a job at McKinsey to develop software for patent work, then duly made the pilgrimage to Sand Hill Road to raise capital. He thought Stilta had finished its seed round when a term sheet from Andreessen Horowitz landed in his inbox, he recalled. Block stopped taking meetings.
Then, Rabin and Holbreich called. The two law school buddies had started an investment fund backed by the same people Stilta was trying to reach: corporate counsels.
“There are so many different funds out there, and it can be hard as a founder to know which is better,” Block said. “With GCVC, it was so clear why they could make good intros and how they would do it.”
Stilta made room on its cap table for the fund.
The model is familiar in other corners of tech. Some funds recruit operators in a particular industry to help source and diligence deals, then open doors to customers after an investment is made. Stage 2 Capital invests funds pooled from senior marketing executives. Cyberstarts is backed by elite chief information security officers.
Holbreich adds that a check from the fund does not come with a promise of new customers. Instead, he expects founders to lean on its investors for feedback about their products.
Some investors may be bound to overlap. Sandstone, a company building software for in-house legal teams, received GCVC’s first check in January. Founder Nick Fleisher said he was recently chatting on Slack with a customer when she mentioned, “By the way, I’m an investor in you.”
Sequoia and Lightspeed, also Sandstone investors, offer it the kind of seal of approval that gets a young company noticed. GCVC’s appeal is more practical, Fleisher said. Its investors can weigh in on questions about pricing and positioning as people who have bought similar tools for their own legal departments.
For these lawyer-investors, success will not be measured only by the returns they pocket. It will also mean helping create products that take paperwork off their desks, leaving them more time for the judgment clients and employers pay them to provide.
“Lawyers are really smart, but they’re bogged down in a lot of paperwork,” Holbreich said. “If you can free their time and advice, you unlock a lot of pent-up brain power for the world economy.”
