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June 1, 2011 6:33 PM

Foley Launches $4 Million Investment Fund

Posted by Tom Huddleston Jr.

Foley & Lardner announced on Wednesday that it has created a $4 million venture capital fund intended for investments in client companies and funds.

Am Law Daily sibling publication The National Law Journal reports that the attorney-funded project is being steered by Boston partners Gabor Garai and Susan Pravda. Garai is chair of Foley's private equity and venture capital practice, and Pravda is managing partner of the firm's Boston office and chair of the emerging technologies industry team.

The project, called Foley Ventures, will invest only in portfolio companies that are projected to have adequate cash flow. Startup clients will only receive an investment from the firm if a professionally managed venture fund also invests.

"[The firm's] fund doesn't make its own independent investment decisions because we lawyers don't think we're any good at that," Garai told NLJ. "We rely on the expertise of professional venture capitalists to make the investment decisions, and then we piggyback on them."

Garai added that Foley plans to focus on investments in the technology and life sciences sectors, along with other emerging-market companies or venture capital funds.

Partners, of counsel, and retired partners are eligible to invest in the fund, which the firm expects to both make money and prove attractive to prospective laterals.

The firm hopes the fund will demonstrate to current and potential clients how much more Foley is invested in their clients' success, Garai said. "It's also a way of showing...clients that you're sort of on the leading edge that goes beyond simply representing them in the technical legal issues that they encounter," he said.

NLJ notes that Wilson Sonsini Goodrich & Rosati's fund, WS Investment Co., was founded in 1978 and remains one of the oldest and most successful of these initiatives. It was especially lucrative during the dot-com boom (the average equity partner got $1.3 million worth of stock from the fund in 2000).

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