OEN NewsMeet Mary Hull, Stoel Rives

We’re pleased to introduce Mary Hull from Stoel Rives as this week’s Sponsor Spotlight. 

OEN: What’s your role in the entrepreneurial community?

MH: I’ve been practicing law at Stoel Rives and working with startups since 1997. I do a lot of legal work with startups and have chaired OEN’s board in the past few years. I represent not only startups but venture capital funds in Oregon. I’m also involved with TiE Oregon, and I’m on the OSU Advantage Accelerator Advisory Board. I judge lots of startup competitions, volunteer my time at a lot of startup events, do a lot of speaking, and I do angel investing myself.

OEN: What type of entrepreneurs are you best suited to support?

MH: Entrepreneur is a broad term. There are a lot of “mom and pop” lifestyle businesses that aren’t trying to scale or be big businesses. While I could help someone like that, they’re not going to need a lot of legal help. So the type of entrepreneur that I’m best suited to help has a big vision for the company and is looking to scale it and go public or have a really big exit; the kind of entrepreneur that’s going to swing for the fences. That’s the kind of company I most like and am most suited to work with because we can help set that entrepreneur up to be investor-ready and make the whole process as frictionless as possible.

For example, say it’s a Delaware C Corpcorp and you’ve got a few founders — we can help make the founders’ shares subject to vesting and advise on fundraising strategy. Maybe the entrepreneur is first trying to raise funds from friends and family — how should that be structured? Are we going to use a SAFE? Convertible note? Then when they get to a real round of financing with a VC, we can advise on that – market dynamics, typical structures, creative deal terms, and so on.

We can also help with stock options and equity compensation structure for employees and intellectual property (IP) needs. Protecting IP is important and something investors want to see, so we help with all of that. The big advantage of going with a firm like mine is that we have a deep bench; we are a big sophisticated law firm so we can grow with the company from when they’re a tiny company they’re a tiny company with needs that aren’t very complex to when they do have very sophisticated needs and it’s time for an exit event. We handle hundreds of transactions each year and can bring all that experience to bear. The deep bench allows us to move as quickly as entrepreneurs want to go.

OEN: What are your most common recommendations to first-time entrepreneurs?

MH: There are a couple of pitfalls I see sometimes: one is that first-time entrepreneurs are often told they need a co-founder. The reasoning is, if you can’t find at least one other person to buy into your vision, then why should an investor buy in? The other reason is that being a founder is really hard. You can’t do it all yourself, and you need a good team. Unfortunately, I’ve seen entrepreneurs take that advice and take the wrong person in haste to get someone. So my advice is to choose your co-founders carefully. Don’t rush to get anyone who will take the job, even though you might feel that urgency because it might ultimately be a waste of time. I’ve also seen complete misunderstandings about ownership and other things that end up being a headache. Give a lot of thought to your co-founding team. Don’t just rush into something just because people say you have to have a co-founder.

Secondly, often first-time founders are really focused on these examples like, “Oh I heard Mark Zuckerberg has got this special supervoting stock so he can never be diluted and always has control — I want that!” And I’m like, “No, you don’t.” We could spend a lot of time putting that in place, and then the first potential investor that comes along and will say, “No way am I going to invest in a company where the founder thought that was ok!” Or if the investor is really interested in the company but says that that has to go, then we have to get rid of it and we wasted a lot of time and money. Entrepreneurs should be concerned about dilution, but there’s a risk of being over-sensitive to that and making it really hard to raise money. The bottom line is, if you need money, you need to make it attractive to an investor. There is room for creativity, but if you’re doing things so creatively initially that it looks weird, investors will get scared off. It’s best to keep things simple and conventional if you want to raise money from traditional investors.

OEN: What do you think is unique about Oregon’s entrepreneurial economy?

MH: It’s a small entrepreneurial community compared to Seattle or Austin or maybe even Salt Lake and people are generally very open to sharing information. The local VC funds will usually talk to any entrepreneur and give feedback, even if it’s not the kind of entrepreneur they would typically invest in. That’s not typical in other geographic locations around the country.

OEN: What do you think is an opportunity for this community to grow?

MH: Entrepreneurs have often told me how difficult they find it is to raise early-stage funds inside Oregon and I would love to see that evolve. We’re a small community and haven’t had the level of big exits needed to really galvanize local angel investing, but I think there are a couple on the horizon. OEN is really good at new angel investor education. We’ve done programs for new women investors, and for angel investing in general. Securities laws generally require that people be relatively wealthy, but I don’t think people realize how accessible that bar is for the average corporate executive. Many people would meet that threshold and could participate directly in startup investing. OEN’s events are a great place to learn because the minimum buy-in is only $5,000 per start. Early-stage investing is risky, but it’s also a great place to make a local impact, especially if you’re focused on underrepresented founders who historically have an extremely difficult time raising early money. As I mentioned earlier, what would also be good for the community to grow would be some big exits. Big exits generate a lot of new wealth, and those exited founding teams can turn around and do angel investing to help bring up the next generation of startups.

OEN: Why do you think OEN has an important role to play in this entrepreneurial community?

MH: OEN plays two important roles in Oregon: connector and celebrator. The OEN Entrepreneurship Awards bring the entrepreneurial community together to celebrate great startup teams, and that’s really important to folks grinding away day after day for years. The recognition also helps create awareness and validation among investors. All of OEN’s networking events help knit the entrepreneurial community together – PubTalks were the original foundation and I look forward to getting back to those post-pandemic, but the investment events like Angel Oregon Tech and Oregon Angel Food create space for connection too.

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