Blake's Baby Has New Twist
Sydney Morning Herald
Friday March 3, 2000
National law firm Blake Dawson Waldron has begun offering legal services to high-tech start-ups in return for equity stakes of between 5 and 20 per cent.
The firm, with global management consultancy Booz Allen & Hamilton and investment bank Rothschild, has established a high-tech incubator designed to provide start-ups not with money but with services.
Offering services as opposed to cash is a twist on the conventional incubator model and demonstrates the increasing interest ``traditional" companies are showing in the ``new media" sector.
The E-Business Accelerator already has 30 companies lining up for assistance and aims to take information technology and Net entrepreneurs from the ideas stage through to an initial public offering. The Australian ``accelerator" is designed to work with other counterpart accelerators in Silicon Valley and Europe, providing dot.com entrepreneurs with global expansion opportunities.
Mr Matthew May, Blake Dawson Waldron's managing partner, said the firm's participation in the E-Business Accelerator was ``damn exciting" given that law firms were ``innately conservative bodies".
``There is not a lack of entrepreneurial flair or funding in the market but there's a gap between the two," Mr May said.
``We believe the `accelerator' can bridge that and give the companies access to rigorous, strategic thinking."
Mr May said Blakes would provide legal advice on anything from intellectual property and trademarks to tax issues, in return for a ``modest" equity stake of between 5 per cent and 20 per cent.
Mr Michael Vukadinovic, Rothschild associate director, said the model was a good one because often start-ups did not have enough money to pay for investment banking and legal advice.
He said Rothschild would be taking equity stakes of between 2.5 per cent and 10 per cent, depending on the level of service provided.
``That's the beauty of this ... you're not diluting the founders' interests," Mr Vukadinovic said.
© 2000 Sydney Morning Herald
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