One of the aspects I appreciate most about venture capital is that our industry marries revolutionary ideas with pragmatism. In 1999, two former lawyers, Brian Liu and Brian Lee wondered what would happen if fundamental legal resources were made available to everyone via the internet. They began with basic forms and documents and moved quickly toward regulatory compliance, company formation, wills, and estate planning. In 2000, the young company went out to raise its Series A financing when the Internet bubble uttered a resounding “pop”. Money was hard to come by and the founders returned from an endless number of VC pitches… with $3 million dollars to fund the business.
Today, $3 million is a hardly noticeable seed round, but the LegalZoom founders persevered. They grew the business gradually and hired slowly, turning the company profitable (by necessity) on that small amount of venture capital financing. They received regulatory approval in all 50 states and customers flocked to the young company to help them start their businesses and achieve peace of mind. Several years later they hired John Suh as CEO, Frank Monestere as COO, and Eddie Hartman as their resident ‘Mad Scientist’ and the company accelerated its upward trajectory. The vast majority of the incremental investment in LegalZoom came in the form of ‘secondary’ shares with new investors buying equity from existing investors and vested employees to join the company on its journey. “Democratizing law” takes time, more than two decades to be exact, and today LegalZoom has established the brand recognition and superior customer experience that can only be built by persistence. LegalZoom is the market leader, offering automation for legal tasks and compliance as well as referrals to pre-screened attorneys for customized legal advice.
With Intuit veterans Dan Wernikoff as CEO and Rich Preece as COO, LegalZoom is ready to raise money again, this time in the form of a public offering. With over $400M in revenue, consistent profitability, and strong margins, LegalZoom has a bright future as a public company. IVP invested in LegalZoom in 2011 and we continue to be grateful for our partnership with management and proud of the talented entrepreneurs who used technology to transform the legal industry. Instead of searching for a lawyer, scheduling an appointment, hauling boxes of files, and getting billed by the hour – why not just point your mouse to LegalZoom.com? They’ll take it from there.
Steve Harrick is a General Partner at IVP, a later-stage venture capital firm based in Menlo Park, CA.