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LAW FIRM OF THE YEAR Goodwin Procter LLP Positioned To Pounce On Wave WHY THE FIRM WON Of Growth Equity Deals Remained highly active in 2008, advising on some 460 buyout and venture capital deals, and on 57 fund Summit The private equity industry has always Pioneered by such firms as formations across alternative assets. inspired its share of cross-market jealousies. Partners and TA Associates, that opportu- Expanded its private equity practice with addition In the late 1990s, buyout professionals nity is to provide growth equity, in return of four partners in San Francisco, New York and looked on longingly as venture capitalists for minority stakes, to fast-growing compa- Los Angeles. made piles of money taking dot-com compa- nies in fields like technology, health care, Opened Hong Kong office in November 2008. nies public at obscene valuations after short business services and consumer products. Expertise in buyouts, venture capital, and growth investment periods. In the mid to late 2000s Growth-equity deals have a “different equity deals positioned the firm well for a market in it was the turn of venture capitalists to grow feel to them” from traditional venture or which both buyout firms and venture capital firms covetous, as buyout shops took advantage of buyout transactions, said John LeClaire, co- are pursuing far more growth equity transactions. easy credit markets to siphon equity out of founder and chair of Goodwin Procter’s 35- In 2008 newsletter The Private Equity Analyst ranked their cash-flow-positive portfolio companies. partner private equity group. The compa- the firm the second most active in the United States Some firms tried to re-invent themselves dur- nies tend to generate $5 million to $15 mil- for buyouts, and fifth overall for combined buyout and venture capital deals. ing these periods, leading to predictably dis- lion of EBITDA on revenue of $50 million astrous results in many cases. to $100 million, with top-line growth well The firm also serves firms like TA Associates The easy money is, of course, a thing of the into the double-digits. The private equity that have long made a specialty of growth- past for both venture and buyout firms. Yet, firm comes in to take a minority position equity deals. if anything, the market has seen an accelera- or relatively passive majority position; the Goodwin Procter seems to have been tion in the trend of venture and buyout firms proceeds go toward financing an acquisi- gearing up for just this moment in private heading in one another’s direction. tion, building out the sales team, hiring a equity history. Since 2006 the firm has It’s not that buyout shops are suddenly talented CFO, or similar business-building been building up its forces on the West taking $500,000 flyers on Web 2.0 start- uses. Leverage is either light or non-exis- Coast, a major hub for growth-equity deals. ups, or that venture firms are pooling their tent in such deals. The founders, who may Since launching offices in Los Angeles and war chests to purchase Home Depot. But or may not be taking some chips off the San Francisco in April 2006, the firm has with their traditional investments looking table, typically stay at the helm of the also opened a second office in Los Angeles, less lucrative right now, or downright organization. The idea is to take the com- an office in San Diego and an office in impossible to finance, many venture firms pany “to the next level,” LeClaire said. Silicon Valley. Altogether the firm has 14 and buyout shops have converged on an With expertise in venture capital, buyouts partners in California performing private opportunity that has always occupied and growth equity deals, and offices on both equity and fund formation work; recent something of a grey area between pure coasts, Goodwin Procter found itself in a additions include Bradley Bugdanowitz in venture deals and pure leveraged buyouts. great position to benefit from the growth- San Francisco (previously a partner at equity trend in 2008. Of the 460 private equi- Latham & Watkins), and, in Los Angeles SNAPSHOT: ty and venture capital deals that the law firm Marc Jones and Elliot Hinds, both of whom Offices: Boston, Hong Kong, London, Silicon Valley, advised on last year, roughly one-third fit in joined from McDermott Will & Emery. Los Angeles, New York, San Diego, San Francisco, the growth-equity category, according to The firm has also set its sights on growth- Washington D.C. LeClaire. Among its venture-capital clients equity deals in Asia, particularly in China and Attorneys: 900 doing more late-stage deals these days: 3i India. Last November the firm opened up a Private Equity Partners: 35 Group PLC, Polaris Venture Partners, General two-person office in Hong Kong manned by Technology Group Partners: 44 Catalyst, NorthBridgeVenture Partners, and Partners Yash Rana and Brian McDaniel. In Fund Formation Partners: 23 Highland Capital Partners. Those on the buy- addition to representing private equity firms Buyout, Venture Deals In 2008: 460 out side of the market doing more growth- on deals and fundraisings, the pair plan to Funds Advised On In 2008: 57 equity deals include firms like HIG Ventures, work on behalf of technology and life sci- Leeds Equity Partners and Webster Capital. ences companies in the region.—D.T. Reprinted from Buyouts, Yearbook 2009 • 195 Broadway, 9th Floor, New York, NY 10007 • (646) 822-3043.

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