Built eighteen years ago during the dot com crash, LegalZoom was created with the vision to provide convenient, affordable, high quality legal help. With a network of independent attorneys in all 50 states, this legal brand provides services and advice for over 4M small business owners and families. It recently expanded to the UK and it is one of the most recognized legal brands in the US.
LA TechWatch spoke with its CEO John Suh, who has been an integral part of the company’s growth since 2005. Suh discussed how receiving an impressive $500M investment will allow LegalZoom to expand its services and continue its growth overseas.
Who were your investors and how much did you raise?
This was a secondary investment of $500M. It was led by Francisco Partners and GPI Capital along with participation from one or more Franklin Templeton Investments funds and funds managed by Neuberger Berman Investment Advisers.
Tell us about LegalZoom’s product or service.
LegalZoom is the most recognized legal brand in the US. Over 4M small businesses and families have trusted us to deliver consistently high-quality legal help. Our platform of people and technology is designed to deliver clear, affordable, personalized solutions for common legal needs.
We are the largest former of small businesses, the largest filer of trademarks, and provide comprehensive estate planning services. Our network of independent attorneys can provide advice and review documents in all 50 states.
What inspired the start of LegalZoom?
Our founders built LegalZoom on the ashes of the first .com crash. It was not a conventional time to begin an internet company, but they believed the product was something people truly needed. They held strongly to the principle that access to quality legal help is a basic fundamental right.
When I joined LegalZoom in 2005 we weren’t trying to disrupt an industry. We wanted to take a customer-centric approach and create scalable solutions for scale problems. Disrupting the legal industry was a byproduct of our mission-driven, innovative solution.
LegalZoom provides valuable solutions that naturally evolve into deeper relationships with customers. We are the alternative to intimidating opaque legal services permeating the industry worldwide. Our philosophy from the beginning was to create a business model that works for customers, lawyers, and the company. A model that would allow everyone to access convenient, affordable, high-quality legal help.
What market does LegalZoom target and how big is it?
We’re targeting every small business owner and family member looking for transparent and effective legal solutions. The market is massive and we’re continuing to explore our options outside of the U.S., most recently through our successful expansion into the UK.
What’s your business model?
LegalZoom is designed for people to benefit from the full protection of the law through affordable, comprehensive solutions. Leveraging technology for automatable tasks, we help lawyers help more people at consistently high levels of quality.
What was the funding process like?
Our process of raising capital has been an amazing 18-year journey. LegalZoom was fueled with only $1M of primary and has completed more than $1B of secondary. Independent thinking has been critical in successful capital raising.
What are the biggest challenges that you faced while raising capital?
When you take the independent approach to raising capital, as we have, you’ll probably make mistakes, but that’s ok. Mistakes create learning experiences. Our first VC meeting was the day of the single largest percentage drop of NASDAQ; rather than following the norm of primary and secondary funding in 2007 we stuck to 100% secondary; we had the door shut in front of us days before we started the IPO roadshow. All of this and more has forced LegalZoom to grow.
How does growth equity fundraising differ from venture?
Though they may overlap, the main difference between growth equity and venture capital is the maturity of the company. Growth equity is generally granted to companies who have already cemented their role in an industry and are looking to accelerate growth and operations.
What factors about your business led your investors to write the check?
Our investors were impressed by our preeminence of brand and leadership in legal services along with our attractive business model. Our investors also appreciated our commitment and mission-driven approach to providing consumers with robust product offerings.
What are the milestones you plan to achieve in the next six months?
We will continue to work towards a world where everyone has a trusted lawyer. We’ll continue to build on our market leadership position by launching new services to small businesses and families while expanding into new channels and territories.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
Think unconventionally. Zag when you’re supposed to zig. Companies who have forward-thinking mentalities are far better set up for success. Unconventionality has helped us to become the market leader.
Those considering a fresh injection of capital should know once you start raising capital, that capital requires a return. Think about the entire program before you take the first step.
Where do you see the company going now over the near term?
We will expand our suite of services much more rapidly. We will continue to leverage evolving technology to improve quality and convenience for our customers.