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Ep 82: How Carta Built a Legal Team from Scratch & Scaled 10X with April Lindauer, GC
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How do you build a fintech juggernaut and redefine how employees think about ownership in businesses, navigate regulatory roadblocks along the way, and build a global team to make it happen?
Join April Lindauer, General Counsel at Carta, as she discusses her start-up’s tremendous journey from 200 employees to more than 2000, as the software platform that allows users to manage equity, build businesses, and invest in the companies of tomorrow as they expand into an ever-growing list of international markets.
Listen as April offers tips for working with regulators, navigating several financing rounds, building out legal operations, working with great outside partners, and hiring the perfect team, and much more.
Read detailed summary: https://www.spotdraft.com/podcast/episode-82
Topics:
Introduction: 0:00
Joining Carta and overseeing tremendous growth: 1:58
Cultivating a career in financial services: 4:10
Carta’s growth from 200 employees to 2000: 6:26
Transitioning from deputy general counsel to general counsel: 8:23
Hiring for a global legal team: 12:30
Navigating the GC role during the COVID-19 pandemic: 14:34
Working with the executive team to make tough decisions: 16:57
Working with financial regulators: 18:22
Leading legal through multiple financing rounds: 22:21
Leveraging Carta’s wealth of data: 24:21
Rapid-fire questions: 27:48
Book recommendations: 29:00
What you wish you’d known as a young lawyer: 30:36
Connect with us:
April Lindauer - https://www.linkedin.com/in/april-lindauer-2174104/
Tyler Finn - https://www.linkedin.com/in/tylerhfinn
SpotDraft - https://www.linkedin.com/company/spotdraft
SpotDraft is a leading contract lifecycle management platform that solves your end-to-end contract management issues.
Visit https://www.spotdraft.com to learn more.
Recommended
Transcript
Building Legal Operations
00:00:00
Speaker
The biggest thing I had to tackle was really building out what I would call legal operations. So all of the things that we were doing that required a lot of administrative time, some of the corporate governance, the contracting. So what I did, one of the first things I did was really start building out a team of paralegals that could really help us. And I think that decision that I made at that point in time has really helped us scale. They've really helped me in terms of just being able to execute faster but also given us so much leverage so I don't have to hire more lawyers. I actually save a lot of money on outside counsel fees.
Introduction of April Lindauer
00:00:44
Speaker
How do you build a fintech juggernaut and redefine how employees think about ownership in businesses, navigate regulatory roadblocks along the way, and build a global team to make it happen? Today, we are joined on the abstract by April Lindauer, General Counsel of CARTA.
00:01:07
Speaker
Carta's platform of software and services helps people manage equity, build businesses, and invest in the companies of tomorrow. I know I've used Carta to manage my equity in a number of different businesses that I've worked for before.
April's Career Journey
00:01:24
Speaker
Before joining Carta as Deputy General Counsel in 2018, April spent time as the Compliance Officer at Assurance, which is a big insurance provider.
00:01:34
Speaker
and as an in-house lawyer at Encore Capital Group, as well as some time at Computer Share, which is another company in the fintech space. She started her career at a law firm in Chicago, and I think this is interesting. You were a legal intern for FINRA, the financial regulator. April, thanks so much for joining me today for this episode of The Abstract.
00:01:56
Speaker
Thank you, thanks for having
Joining CARTA
00:01:57
Speaker
me here. Okay, so your career in my mind at least is so closely linked to Carta's growth story. When you joined Carta, did you have any idea about how big the company was going to become?
00:02:11
Speaker
not Not at all. I think ah what really attracted me to the opportunity, well, two things. One, just the compelling mission of the company to create more owners. That was something that really attracted me to the opportunity. But it was also an opportunity for me to work with um several folks I worked with at Computershare previously. So it was sort of bringing the band back together in a lot of ways.
00:02:37
Speaker
But Carta was the first startup company that that I had ever
Choosing the Right Team
00:02:41
Speaker
worked for. so But I went in eyes wide open thinking this could either be you know huge and sort of where we are today or you know I might be looking to do something else in a couple of years. But either way was really up for for the challenge at that point in my career.
00:02:58
Speaker
I think that's such an underrated thing to and like to choose when you're picking your next job is like picking your boss and picking the team as opposed to just picking the idea or the funding or the salary or what it is, right? I mean like the people that you work with are so important.
00:03:12
Speaker
Yes. So, so important. And that's something that I also look for when I'm hiring team members. ah You spend so much time at work and it's really important to have a team that can really just work closely together. I feel like, as you said, you know, Carta was really your first sort of like Silicon Valley tech company or like true startup company.
Building a Team and Products at CARTA
00:03:34
Speaker
What was it that that made you willing to take that risk or or want to move away from sort of more traditional businesses like an assurance? Yeah, I think it was an opportunity for me to um really build something from the ground up. When I joined Carta, there was one person working in compliance, only a couple of lawyers. And so I was really brought in to help build a couple of our products, as well as help build out a team because I had built and managed teams in the past. uhhuh So I looked at it as an opportunity to build, and that's what I really enjoy.
00:04:10
Speaker
Yeah, I feel like a lot of your career has been around financial services or working on businesses that are helping innovate in some way in finance. Is that something that you stumbled into or did you know that you you like i don't know you wanted to work on finance and markets and money? and I had no idea when I was starting out my career as an attorney that I'd be where I am today. I worked for several years before I went to law school and I i thought I would be an ERISA or employee benefits attorney because I had worked as an employee benefits consultant. And it was really that internship at FINRA at the time NASD that really started my career in financial services.
Pivotal Internship Experience
00:04:50
Speaker
hu
00:04:51
Speaker
take us back to like that that internship, actually. I'm very curious, right? like Since you worked at, well, they're they're a quasi-regulator, but but they're a quasi-independent regulator, not a part of the government. Does that, like working there, working around those people, does that still shape your view today and the way that you go about your day-to-day?
00:05:11
Speaker
Absolutely. I think ah that time at FINRA was really ah instrumental in so many ways in my career. I was their very first legal intern wow in their enforcement department. And so I worked on just a number of cases there, everything from fraud cases to violent settlement cases. I mean, it was a broad swath of of legal experience. And it really gave me that exposure to financial services.
00:05:40
Speaker
So that's what really started my career in this area. I had no idea when I took that internship is that it would just be that pivotal. But you never had to get like your Series 7 or whatever it's called? No, I didn't have to do that. But do you feel like you have a de facto? I do have a de facto and everyone is encouraged to study for it and essentially take the test. while you're working there, just so you can be familiar with securities laws and regulations. So I did that. I jumped in quite a bit. I also had a wonderful mentor there by the name of Dale Glansman, who is one of my closest friends in the legal community today. Every single job I've taken, I call Dale before I make the leap.
00:06:25
Speaker
yeah That's great. When you joined, Carta was about 200 employees.
Growth at CARTA and Product Development
00:06:30
Speaker
yeah Today, the business is somewhere around 2000 or so. so you've You've literally helped them 10X, I suppose, over the time that that you've been there. Take us a little bit on that that journey from 200 to 2000 and maybe some of the some of the highlights.
00:06:46
Speaker
Yeah, I think some of the highlights were I joined shortly after their series C fundraising. So I joined at a time when we were really looking to launch what we called our public markets product. So that product was an employee stock option plan for public companies.
00:07:04
Speaker
ah So we ah had just formed a broker dealer at that time. And so that was really why I joined Carta. I also joined at a time where, you know, their core business, they are an SEC registered transfer agent. So it was also to help bolster that compliance program as well. And then also just to help manage and scale all of their legal services. So I joke around and say my job when I started was everything.
00:07:34
Speaker
And it over time and as we went through various rounds of fundraising, we started hiring for more and more specialists. ah Got it. And whether it was in compliance or in in legal. So but I was really I really joined the company as a generalist at that point in time. So I did everything from commercial contracting to employment to IP, you name it. I was managing that along with a small team of lawyers for about two years.
00:08:04
Speaker
And how big is the whole legal team today? It's like 50 or so? Well, I manage today legal compliance and risk on a global level. So we have close to 50 employees globally of those employees. I believe now that 17 of those employees are lawyers. Are lawyers? Yes.
Challenges in Legal Operations
00:08:23
Speaker
When you were hired, you were DGC and then you stepped into the GC role a few years in and you've been GC for about five years or so, a little more. What were were you what were you most excited about taking on when you became GC? And and I'm also curious, like what what was the what was the learning curve or the growth curve that you felt like you you really had to tackle there too? It was a huge learning curve for me. I mean, i I was very familiar with the company and the product, so I felt like I had a leg up there. But what was really interesting is the biggest thing I had to tackle was really building out what I would call legal operations. So all of the things that we were doing that um required a lot of administrative time, some of the corporate governance, the contracting. So what I did, one of the first things I did was really start building out a team of paralegals that could really help us. and i think
00:09:18
Speaker
That decision that I made at that point in time has really helped us scale. yes They've really helped me in terms of just being able to execute faster but also given us so much leverage so I don't have to hire more lawyers. I actually save a lot of money on outside counsel fees as well. So that that was the biggest thing I had to really tackle.
00:09:41
Speaker
Let's talk about that actually a little more. I mean, we're big fans of LegalOps on the podcast. I have heads of LegalOps on, our COO led legal operations at Meta and at Coinbase before he joined us. When you were making the case for that or sort of setting the vision for that, I'd imagine that something like your CEO and your CFO probably thought was a fantastic idea, right? yeah yeah yeah Take us into that a little bit more. Yeah, i it actually the timing was pretty fortuitous because we had done what we called an aqua hire in Canada um of a company called Kick. ok And part of that aqua hire, a woman who leads my legal operations now, Michelle Dent, ah she came over with that aqua hire.
00:10:27
Speaker
And so she you got a superstar. i I got a superstar. So she really was a partner for me and all of all things legal operations. And we really just started from a foundational place. So one of the first things we did was I said, how do we you know just get our filing, our matter management together? And so we focus a lot of our time on that. Fast forward to today.
00:10:54
Speaker
Now we're looking at ways to accelerate our contracting and build into our sales and go to market infrastructure. so But she really helped me lay that foundation. And it was not a hard case to make, um to especially to the CEO. He loves paralegals. ah They've been instrumental to Carta's growth um from our channel sure network. works So it was really an easy case to make.
00:11:17
Speaker
Do you feel like you've ever had to bring sort of like the legal team along with you on that operational journey as well? like I'm always curious about that. i mean Part of it is selling it to the sales org or finance or whoever is going to back that adoption of the tech, but part of it is also bringing the lawyers along too.
00:11:39
Speaker
Absolutely.
Adaptability and Delegation
00:11:40
Speaker
And lawyers all have different ways, including myself, that we like to work and we like to manage our work. I think for me it was use the word adoption. It was really working very closely with my leaders to say, look, these are tools we have to adopt and here's why. uhu It was a pretty easy selling point when people on the team started using you know the tooling and realizing this is this is helpful. Sure. I think the bigger challenge is with lawyers that maybe have never worked with a paralegal or managed a paralegal. That's something that, you know, sometimes lawyers want to manage that work. Yeah. So it's really, you know, but handing some of that off, I think it was the biggest challenge. But my team, again, it's very flexible and adaptable. So learning and delegate. Yeah, exactly. Learning to to delegate.
00:12:30
Speaker
As you've built out that team, it's it's spread around the globe. yeah I'm curious how you've gone about hiring and if there are specific things that you look for, right? like ah How do you test for people who are going to be very business minded, let's say, and work really well with other cross-functional leaders?
00:12:50
Speaker
Yeah, yeah we are we are very purposeful when we're interviewing, especially for lawyers. There are times I have hired, you know i wear ah for example, I needed someone for employment. We're looking for those skills. But on top of that, we do a lot of behavioral interviewing, a lot of role-playing, giving people real scenarios to see how they would react and how they would approach a problem.
00:13:16
Speaker
I'm really looking for lawyers who may not always know the answers, but I'm looking for how do they approach and solve a problem yeah instead of you know being able to recite you know a statute or a law. Because let's face it, we all have to look it up sometimes or all the time. So I think that's really, I'm looking for folks who are adaptable, who are problem solvers, aren't know-it-alls, and really want to learn.
00:13:44
Speaker
yeah so I like that role playing, like do you do that in a group setting or do that one-on-one or do you bring them in person or like what does that look like actually? Well we did a ton of hiring during the pandemic so you know it was everything was pretty much you know virtual and really in the last two years just as as an aside some of the people I hired I met for the first time in person um which is was kind of ah unique yeah but no we do a lot of you know here's a scenario how would you approach it?
00:14:15
Speaker
And we just really listen to how they would approach the problem. What questions will they ask? right That's the other thing I'm looking for. I'm not looking for someone to just dive into an answer. I want to see what kind of dialogue would they have with, for example, that business person to solve the problem. I like that a lot.
00:14:34
Speaker
And you anticipated my next question, which is about COVID and yes ah right like building out a team during COVID. You became GC sort of in the midst of this, right? and Was it in the fall of 2020? Yes. Yeah. like How did you and Carta and your team navigate COVID and come out the other side stronger?
00:14:58
Speaker
It was really interesting, and you this was ah very public. In April of 2020, we did a pretty large reduction in force, really not knowing what was going to be coming from from COVID. What ended up happening was the absolute opposite of what we thought was going to happen. right Our business actually accelerated and for lack of a better word exploded, uhu um starting in mid 2020 through 2021, following along the lines of what was happening in the market. sure So we actually did a ton of hiring
CARTA's COVID Adaptation
00:15:33
Speaker
during COVID, ah as well as I also you know built and skilld scaled much of my team during COVID. uhhuh So we were very personal purposeful as a company. I mean, Carta really embraced, you know, having as much time on Zoom with your teams as possible um and really finding places to connect. But as a company, we ah really accelerated. We actually got really efficient too during that time. Yeah. So there was a lot of learnings. I mean, I think like as you're building a remote team, just if you're on Zoom with your team, carving out time to actually talk to people about what their weekend was like, as opposed to making it wholly transactional is so important. yeah right I mean, I'm sure that you all
00:16:20
Speaker
had a lot of learnings that you continue to be able to apply today if you're still quasi remote or right I mean people are all around the globe right I mean I think I think a lot of businesses got better at working somewhat virtually yeah during that time Yes, we we absolutely did. We also, and we continue this today, we also had, you know, weekly standups where people could just join a Zoom and just connect with their teammates and talk about whatever they want to talk about. So we really got more purposeful with how we were spending time together as a team and that's continued to this day.
00:16:58
Speaker
You mentioned at the very beginning having to sort of make like a difficult decision and and having a riff and ultimately like the company, you know, that being the right call for the business and the company coming out the other side stronger. I'm curious how you feel like you and the executive team make tough decisions like that or able to have sort of like courage in your convictions and also how you how you talk about that yeah with with your employee base because that's not always an easy thing to do. right i mean I just use that as like an example. Yeah. so i I'd say to so two things there. I think one, our CEO has really set a tone to say,
00:17:38
Speaker
like we're going to do have to make hard decisions. He'll often say, Carta is hard yeah because we're solving really difficult problems as a business. sure But he always says you know he's going to approach those hard decisions with, are we doing the right thing by the business and by the employees? So we've always treated any reduction in force or any decision really to part ways um with an employee is something that we want to make sure is done in a respectful way, that we're transparent, and that we also help them you know with a reasonable severance on showing their way to their next you know their next thing. That's an interesting idea, actually.
Regulatory Openness and Partnerships
00:18:22
Speaker
One of the areas that I wanted to sort of explore with you is how you approach working with regulators. I mean, we talked about how CARTA is a highly regulated business, yeah right?
00:18:33
Speaker
You have experience working directly for FINRA. yes yeah i mean you know if If you think about the SEC or other regulators around the globe, right i mean how have you managed that regulatory landscape, built out a team, tell us a little bit about that.
00:18:50
Speaker
Yeah, so the way that we've approached it is, again, as part of our operating principles, we always want to be open as open and transparent as possible. So our approach with regulators is to really have open lines of communication with them. you know we During my time there, ah we've you know started two broker dealers. So we've had to you know engage with FINRA and the SEC and really just making sure we have an open dialogue with them. And I've also looked for outside partners, so outside counsel, who also have really strong relationships and can help us navigate you know where are the regulatory policies going today. Sure.
00:19:33
Speaker
So I think my advice would be to any lawyer or compliance professional working in a regulated space is also look for those right external partners. Sometimes you can't always do it yourself. For sure. Is that an important part of managing this sort of like global complexity? Absolutely. I mean you're operating not just in the United States and not just with the SEC. I mean I know like as an example you have employees in Singapore, right? Yes.
00:20:00
Speaker
Yeah, how do you how do you manage some of that patchwork of global laws and regulations? So we we always look for those experts to bring them in, in-house. So um we are looking, you know, right now we are looking to expand in Europe. So we have hired um a number of people in the UK and in Luxembourg. huh So really bringing in that in-house talent because I don't have experience in dealing with regulators in Luxembourg. So let's bring in that talent.
00:20:30
Speaker
But also, again, really finding the right external partners. So when we were looking, for example, to expand in Europe, we actually went out and did an RFP to try to find the right partners and also reached out to our our networks to say, who who are the best you know external partners for this expansion?
00:20:51
Speaker
Why Luxembourg? ah i'm actually and I'm just curious about that. So Luxembourg, we are looking to expand our fund administration business. And Luxembourg is where a lot of European funds are based. Are like headquartered or have their yeah prior offices. Correct. So that is ah sort of a launching pad, similar to our decision to open an office in Singapore. That was really our launching pad for APAC. Interesting.
00:21:21
Speaker
I also think about your tenure at CARTA as overlapping with like a series of jumps in valuation and yeah fundraising
Investor Alignment Philosophy
00:21:30
Speaker
rounds. And yeah, I mean, when you started, as you mentioned, you you CARTA was at a series C today, right? It's series G and the valuation is like 7.47 and change billion dollars. ah Last valuation. yeah Last valuation. yes yeah ah But any learnings from going through all of those rounds of financing that you'd want to share? Yes, I would say the biggest learning for me was, and this has been something that I've truly appreciated, our CEO Henry Ward's philosophy.
00:22:04
Speaker
When we looked for investors, we were really looking for people that also could help us really be partners to us. So in that fundraising, we also brought on just some really incredible investors and board members and board advisors. So I think that was a big learning for me. And and I think you know for anyone that's at a startup, it shouldn't be about, okay, let's make sure we can get you know the most money as possible. It's also right who's going to be on your cap table? Who's going to be on your board? Who's going to be an advisor to you? I would say the people that I work with now on our board and ah our board advisors, they are all really caring and just wonderful and want to be helpful. So I think it's really not just looking for the money, but who's going to help you really get that next you know inflection point in your growth.
00:22:59
Speaker
We're talking about international expansion or raising capital. or mean These are things where legal has a really important role to play. But it's also there's also a question about like is legal leading or is legal working really closely in concert with other partners in the business? yeah Just generally, like how do you how do you think about that? like How does legal set the right tone for something like we're going to go into Europe or we're going to go and we're going to raise it?
00:23:26
Speaker
Series e round or yeah. Yeah, so we um were really partners with the business So we have for example a strategy team that we partner with very very closely on all of these growth ideas as a leadership team and All of these ideas ideas, and we iterate so much as a leadership team, and it's actually one of my favorite parts of the job, yeah is that we you know an idea someone will have an idea and you know it could be from the ground up, but we really have a lot of discussions around, is this the right thing we need yeah for the company?
00:24:03
Speaker
and so Legal is really a partner and it takes a supporting role in terms of you know when we decide to expand. It's really the business yeah that's really leading that at Carta. ah Last maybe set of substantive questions, and then I've got a few fun ones for you.
00:24:21
Speaker
It kind of puts out really interesting reports. I mean, you sit on a really interesting sort of data set, right? You can look sort of anonymously yeah across all these businesses like as an example about the diversity of equity holders in companies. And, you know, are things trending in what we might think of as the right direction in terms of ownership and employees being able to own and also sort of like diverse sets of employees being able to own.
00:24:47
Speaker
Tell us about that work and maybe even, I mean, probably started while you were there, what what inspired it. Yeah, absolutely. Well, you know, just given the number of companies that are on our court platform, ay we have really an incredible data set. And it's something that we brought on Peter Walker, um who leads our what we call our data insights.
00:25:10
Speaker
uhuh team and he was really, you know, the front runner to getting these datasets out. And I think it's just incredible work that we're doing. It really gives, you know, it's not an entire you know picture. yeah of um everything in you know the venture world, but it really just um provides, I think, so much interesting data that you know if I'm a founder, I'm looking at that and saying, okay, well, where where am i am am I in terms of a benchmark? yeah to this data. and so And I think the work that we've done to show um diversity or lack thereof yeah in terms of equity awards, for example, I think that is really powerful data that, again, if I'm a founder, I'm an investor, that's really important to me too look at to see how we can make improvements.
00:26:05
Speaker
Yeah. I mean, you can think of how it could either through sort of like journalists who are looking at it or the reports that you're publishing or actual sort of decision makers, people who are at the table who are deciding, OK, we're hiring a woman into the CFO position. What should her equity award be? Absolutely. Right. You can see how it would actually drive change in decision making. Yes, absolutely. And that was really, I think, the overriding goal behind it. It wasn't to dictate, oh, you know you need to hire more you know yeah more people in this particular role with this profile. It was more, are you paying people fairly and e yeah from an equitable perspective? So I think that's really powerful data.
00:26:49
Speaker
Absolutely. Okay, I'm curious, like what are you most excited about working on next?
Future M&A and International Expansion
00:26:56
Speaker
This will come out in early 2025, right? Like what what's on your roadmap? So I'm really excited to see where we go from an M and&A.
00:27:05
Speaker
perspective in the next year. We just announced an M and&A transaction a week or so ago of a company called Tactic. ok So we are definitely looking at M and&A opportunities, so I'm very excited about to see where that goes. And then I'm super excited about our international expansion. yeah We discussed earlier we're looking to expand more in Europe and in APAC.
00:27:29
Speaker
And I think those markets are are ready for Carta. So I'm really excited about our expansion internationally. So if you're a lawyer in Europe or APAC with securities experience, call April. and Yes, I don't have any open rules right now. In the future, you never know. Okay, I've got a few fun questions for you. ok Your favorite part of your day today?
00:27:56
Speaker
My favorite part of my day-to-day job, I would say, is meeting with and and mentoring my my team. Every single day, I feel like I'm really a coach. ahhuh And I love that part of my job. I love that part of my job with with my business stakeholders too.
00:28:14
Speaker
yeah I'm really seen now and I enjoy this so much as a partner, not just ah a lawyer or in some organizations a blocker. So I really enjoy that part of my day.
00:28:27
Speaker
not a blocker, but like do you have a professional pet peeve? I think this is kind of a funny question. um A professional pet peeve, I would say, are people that interrupt while others are speaking. That is definitely a professional pet peeve. It's something I've had to work on personally yeah when I want to jump in, yeah but it is also something that ah I try to stop when I see it happening.
00:28:54
Speaker
Hopefully I have not done that today. I just interrupted you but you have not done that at all. I'm a big reader and I really like to ask our guests. I mean this could be a business book recommendation or it could just be something that you've read for fun recently if you have a book recommendation for our listeners.
00:29:12
Speaker
I have two. Great. I have two. So ah one, and you would not think this is a business-related book, but Born Standing Up ok by Steve Martin is a wonderful... An amazing actor from my childhood. Yes, amazing. My parents you know had his comedy album albums, but the book is about how he became a stand-up comedian and how he made the decision to stop being a stand-up comedian. And so it's really just... It's a really powerful book about changes in your life and how your upbringing, um you know, sort of influences your decisions and your choices. So highly, highly recommend. And then a book that I'm currently reading that I i think a lot of people are reading is All Forest by Miranda July. Oh, I haven't heard of this. It's more a book for fun, hu but she's an amazing, she's directed some films. She's written a few other books, but it's sort of a midlife crisis type story. yeah um And it's getting, it's I think it's on a lot of top, you know, 20 book lists this year. So I won't give away the plot, but all fours, Miranda July.
00:30:29
Speaker
Great. Very interesting. Both of those sound like but fun books to read on an airplane. Yes, absolutely. Okay, ah my last question for you, a sort of traditional closing question that I like to ask guests, is if you could look back on your days of being a young lawyer just getting started, something that you know now, that you wish that you'd known back then.
00:30:54
Speaker
I think something I know now is that your career is not always going to be linear. I think a lot of lawyers, you know, go into law school thinking, okay, there has to be a certain career progression. What I would say is, you know, really look at what interests you and um take chances.
00:31:13
Speaker
That's great. yeah It's a great thing to close on too. I love that. As we head into next year. April, thank you so much for joining me for this episode of The Abstract. Thank you. And to all of our listeners, thank you for tuning in and we hope to see you next time.