Evan Ng is Co-Chair of Dorsey‘s life sciences and healthcare practice and leads the firm’s Corporate practice in Northern California. Evan has advised hundreds of healthcare startups and helps guide entrepreneurs through company formation, capital raises, M&A, and everything that happens along the way.
On this episode, Evan shares his perspective on the impact COVID-19 could have on healthcare and explains why periods of great change present opportunities to build successful businesses.
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S1:E3 | #3 – CV19 Recession? With Evan Ng, Partner At Dorsey
In this episode, we have Evan Ng from Dorsey, Co-Chair of the firm’s Life Science and Healthcare Practices. Evan, welcome down to Unmet Need.
Thank you for having me.
It’s a pleasure. There are going to be three parts. Tell us about Dorsey and your practice. Next, we’ll try to understand a little bit more about you, Evan Ng, the man behind the title and all the accomplishments. Third, we’re going to go to the vault. We’ll keep it moving. With that, let’s start off. What type of business is Dorsey?
We’re a full-service law firm. We have 600 lawyers. We should be able to deliver in some shape or form every legal service you can imagine for a corporation. In the case of MedTech life science companies, we help founders start the company. We help them with financing needs. We help them with employment needs, and we take them forward. Hopefully, there is an exit transaction that we also help the company with. Along the way, there are other legal needs. IP, labor and employment issues, litigation, and things of that nature come up. We will provide services as people need and hope to deliver them at the expert level so that people are happy.
In your role as the Co-Chair of the Life Science Practice, how is Dorsey’s Life Science Practice different than some of your partners in other sectors? Is there anything specific about life science businesses where your expertise is most important for clients?
There are more nuances with life science businesses. The first thing that comes to mind is it’s a longer haul than another dot-com business. When you start, you got to think about things that are 5,6,7 years ahead, and the median time to exit is that much longer. Those are things that you don’t necessarily go in with the expectation of a quick in and out of the business approach. You’re trying to build a business. You do things methodically and you have to be careful about things a lot more.
As an example, for people on the tech side, one bad deal is easy to recover from. On the life science side, it’s much harder when you have a compounding impact of something bad that happens, and that goes on over time. When the exit transaction is down the line, it’s more difficult. Overall, it’s a business where you look at the creation of the company in the beginning. You make a long-range plan. See if we can accomplish the outcome and help patients. Even though I’m a lawyer, I’m indirectly helping patients hopefully.
In your role, you can help patients at scale. For example, how many life science companies have developed some type of product service that ultimately is targeting the patient to improve patient lives? How many companies would you say you’ve represented in the last years?
It’s hundreds at this point, it’s a lot, and the workload is high. You can think of it almost as vintages of companies that move forward each year. You will have a pipeline of companies that come in and graduate and exit. Every year we have a number of large exit transactions and new companies get started every year. It’s exciting, it’s fresh, and it’s always moving. This environment is interesting because this COVID depression that we’re in is a new and tremendous window for a lot of new companies to get started.
When there's a tremendous need to preserve cash, a company's behavior will change. Click To Tweet
You have a lot of people who are soon being dislocated in terms of employment and other issues of that sort. They then go on to start new companies. We’re going to get some pretty interesting new companies out there. You have folks who are perhaps not traditionally in the life sciences or healthcare area and may be considering moving into the space with a tech background. That would be an interesting dynamic. That did happen in the last recession and the recession before. It’s an exciting time.
There’s a lot of great information in there. The first one I want to come back to is you talk about the COVID recession. I’m curious. What do you mean by that? How do you think about the COVID recession in terms of life science, your practice, and healthcare startups?
This is an interesting time. We are in the middle of a correction in some fashion, whether it’s significantly different from the 2008 or 2009 era. We can only tell in a few months. What we’re hearing with different clients and in boardrooms is the tremendous need to preserve cash. When that happens, companies’ behavior changes, layoffs happen, and spending cuts happen. Those are all challenging things that ripple into other aspects of the economy and society. That seems and feels the spark of a recessionary environment. We see and feel it, but the data is not quite there yet, but it certainly has that feeling.
If we think back to the last recession in 2008, there was inefficiency in the capital markets. That’s not what we have. It’s a different pattern. If we look at the major stock indices, they’re all performing relatively well. One of the concerns that I’m certainly tracking, and others as well, is what it means when the global fiscal policy is so inflationary and governments and central banks are printing money for stimulus and outside of inflationary concerns.
The next thing for me that comes up is, “What’s going to happen when 15, 20, or 30 million Americans are unemployed, not to the overall US GDP but more specifically to the healthcare space?” That’s where healthcare could be better situated because of the Affordable Care Act. A stimulus that’s going to help employers even continue to provide health care insurance for laid-off people or furloughed.
While there will be fewer employed people, depending on discretionary purchases, taking out loans, and using services, when it comes to healthcare, my position is that there are safety nets in place, whether that be for low-income people or unemployed, tired folks that are on Medicare, or the remaining workforce that still has company-sponsored health insurance.
My personal view is that healthcare, products, or services that are ultimately paid for by insurers, whether they be government payers or commercial payers, in either case, there’s still going to be a lot of patients. The point that you made about entrepreneurs and builders that haven’t historically focused their energy on healthcare is the combination of a lot of people that have some form of insurance.
That means that there will be a payment for a product or service, coupled with the fact there are several enabling technologies that started outside of healthcare, for instance, video conferencing. It’s been around for a long time. Based on constraints that started from COVID-19, it drove new consumer behaviors and consumers, in this case, being patients. One of them is telemedicine. It’s something as simple as this interaction we’re having. You’re a highly trained professional. You’re compensated for your time, giving advice, and guiding people on how to manage risk.
There are a lot of parallels to what physicians do. If you think about enabling technologies that have reached a critical mass where they’re less expensive to deploy, widely available, and oftentimes can leverage through your mobile phone, entrepreneurs that are displaced, healthcare still has a lot of payers, do you think that combination ends up with more healthcare startups? Will it be something different?
I do think there will be more. We are currently in this early phase of trying to figure out the new normal. There are a lot of unknowns. You start a company today. The traditional steps of having co-founders or other folks who are helping you along are not taking place with traditional meetings in person. The brainstorming sessions are different than what people are used to. The way of working is evolving. This initial window of getting things together and going is trickier or at least not what people are used to.
Once we move past these, other logistical issues will come about and we will overcome those too. Other things that are immediately like talking to investors in this environment used to be a much more face-to-face arrangement. The investor had to come to see the offices to diligence what was going on. You have data and need to do a demo for a prospective customer. All those things are going to change. Every aspect of life is changing. Once we get past all of that, there are new, blank spaces to go into the opportunities that exist.
Telemedicine enabled the delivery of various things or the blending of technology into the healthcare system and delivery of it. Before COVID, there are so many hurdles to getting anything done. Think about telemedicine. It used to be the less favored approach to delivering care and getting providers paid. Those are all gone overnight. It’s a preferred approach.
There are going to be more of these types of things. You can even imagine devices that are more connected but remote so that the patient administers those particular devices for the physician to check. All those things are much better positioned as we finish through this change in paradigm and behavior, and we move to the new normal. There’s a ton of opportunity. That’s where the folks who are going to experience a change in their circumstance are maybe considering starting down a new path.
They’re going to look at healthcare as a big opportunity to change what they used to do, deploy their previous skillset and start something new. There are huge opportunities, but it will take a while because everything is so different, at least in the near future. Give it 5, 6 months. When we turn around to 2021, there are going to be a lot of interesting and exciting things that will present themselves.
That’s exciting because times of great change create several constraints. When there are new constraints, and particularly when the status quo has been disrupted in some way, that means the incumbents, the market leaders, and the companies that have almost figured it out are on their heels. The rules of engagement have somehow changed, whether it be through access to the hospital, how one is interacting with the patient, or even including things like regulation.
As all these things change, you take a system that was in equilibrium. Everything gets thrown upside down. It’s a perfect environment for a new company to come in. That’s not always tackling a different problem, but the solution that they’re implementing to address that problem is timelier for the environment. As a builder, I’m excited about that. I wish this wasn’t the case. Over my career, there was the dot-com recession. It’s what pushed me into healthcare.
I was one of those entrepreneurs focused on another space. I got displaced. My work situation changed. I went to a marketplace that was mature. It’s a large opportunity where I thought I could have a career path for a long time. You deal with company formation. That’s one of the leading indicators of new company development. If you think back to several years ago and take your entire client base, what percentage of your clients were medical device and diagnostics, therapeutics, biotech pharma, digital health, and healthcare IT? What was the breakdown?
If you look back a few years ago, it would be predominantly MedTech, medical devices, and therapeutics. It’s a sprinkling of diagnostic tool types, but nothing on the digital side of things. If you compare it, there is a significant decrease in terms of the number of device-side clients. There are more of these quasi-digital/device type approaches that are happening. It’s been a shift and we’ll see it even more. There’ll be more of the tech to healthcare migration. That’s going to bring something new.
If you can't get excited about whatever it is you're going to do, you need to think about it a little bit more. Click To Tweet
I can imagine that as well. In your practice, founders are coming to you at some point to start their company. Do you envision the time from founding to capital raise to commercialization to exit, is defined as an M&A transaction, a licensing of the IP, or an initial public offering? For these technology-driven companies, will the time to exit be shorter or longer?
There is an opportunity for a select group to get a shorter outcome, but for the majority of them, it would be longer. The reason why there is that tiny opportunity is you look at Zoom. It’s not an analogous thing. The availability of a particular solution that happens to nail it dead on becomes essential. That opportunity could exist for something out there. You could have a home run winner that’s on a compressed timeline. It is a viral outcome that will be a winner. As I was explaining about the difficulty in getting to the new normal, that window of time is added to a standard development cycle.
The rest will take longer, things like selling to a hospital in this most remote environment and getting reps back into meeting doctors. I don’t know how quickly and how easily that will take place in the new norm, this minimization of social contact over time. It’s a different way of doing business. I don’t think that will be a faster way. Everything might take longer. Productivity might decrease. I do think that there will be this divergence in the timeline.
I received two pitches, both for products that would be considered medical devices, the beneficiary of the technology. The innovation was ultimately the patient. They would all be regulated by the FDA, either Class 1 or Class 2. The difference is the go-to-market strategy was direct to the patient. That’s primarily because the patient is buying this thing directly.
They have interesting technologies and important innovations, but their go-to-market strategy is going to look more what we see on Instagram than hire a direct salesforce, do training with surgeons, and try to navigate hospital approvals as different as that may be to the way MedTech is sold. If we look at areas of health care such as aesthetics, certainly some of the interesting things in dental, whether it be for teeth whitening, or teeth straightening, that go-to-market strategy is common.
In the context of the COVID-19 recession, companies, boards of directors, VC investors, and founders are looking at their balance sheets. When faced with the uncertainty of when will cases resume, and revenue start to resemble normal, they’re having to think hard and long about what we are going to do with our cash. That’s a constraint.
I’m feeling it personally in my role at Providence Medical Technology. What’s refreshing though is I happen to have the opinion of the commercial model for MedTech. We’re probably at the later innings of that model. Whether you’re the large strategics or you’re the startup companies, everyone’s running roughly the same playbook. The problem is nobody’s growing 50% in MedTech but a few people. That cohort of companies is small.
I would argue that for the companies that are growing that fast with a traditional commercial model, there is some type of migration of site of service and an underlying DRG, APC, and CPT code dynamic where the economics driving that. That’s especially evident in a pattern that I look for in the small amount of angel investing I do.
If technology enables a type of physician specialty that currently can’t participate in providing the service and the related CPT code or professional fees, technology breaks that constraint and allows a specialty to begin performing that surgery or treating that patient. Cardiothoracic surgeons were displaced by interventional cardiologists with the invention of the stent and the angioplasty balloon. When I see that pattern, there’s likely going to be a commercial success.
I don’t attribute that success to the commercial model that we’ve all been implementing for so long. The other dynamic that could be present post-COVID-19 is if you can take surgery out of the hospital. Because of some features of the technology practice of that technique in the ambulatory surgery center where the end-user, the physician, has some financial interest, you can enable that physician to safely and effectively perform that technique.
They treat the patient as well or better, but also have some type of financial incentive at the facility level that works. There are a couple of exits where it wasn’t the commercial model that led to the growth and ultimately the M&A event. It was the economic situation. I want to go to the next question. If you think about your practice at Dorsey, how would you segment your customers?
We take founders through a journey of starting a business and taking it forward to its logical steps, and hopefully, to a successful conclusion that they achieve hopefully, financial and clinical success. That’s a big hope that we have. Along the way, there are various steps that grow the company that they found. They go into different stages as life goes on. When you look at a founder or a few founders who get together and they start a company, at that very day zero stage, that company looks different from a company that has raised venture capital dollars.
We treat those segments slightly differently. They need different things and have different demands. As you go on, you get regulatory clearance and you’re a commercial, that’s a whole different world, too. We have different founding, pre-commercial, and commercial type segments that we look at. The needs are different at different junctures. Probably each of those is its session someday for your audience. They are different animals.
When we met, Evan, how many years into your practice at Dorsey were you, and how many years into practicing law at all?
At that time, I was probably ten years into the legal practice and probably a few years into Dorsey, I still had a lot more hair. That was a while back. You’ve been with the Providence journey for a long time. You’ve seen the different phases of the company. In the beginning, if you remember, we met at a Starbucks. There was no office. There was nothing for you. It was just a pitch book and the story.
You were diligent. You developed the idea some more. You raised money and then entered into that next phase. The products got developed. You have further growth of the business and then, you’re in the next phase. You’ve experienced each of those stages, and they probably felt different. I don’t know if you had a perspective about going through the stages of life in that founder’s journey.
If you think back, that was 2008. Since then, you’ve helped me start an extremities-focused company, a Class 1 device, trying to fix a carpal tunnel. We developed a device that treated 3,000 patients with great IP. It was excellent counsel and advice. Ultimately, the company failed because of the unit economics. It was a real lesson we learned. We were trying to sell a $1,000 solution into a market where there was only about $1,000 of facility reimbursement.
We also were a little early on ultrasound-guided surgery. However, the loyalty and trust that you built with me through that process are interesting as a founder. It’s not when things are working, or when you close the round, or you get the FDA clearance and you commercialize and you’re doing a big contract or something, where you need your attorney to advise you, is on the bad days.
For lawyers, it's a better feeling to have companies that help people than companies that just make a lot of money. Click To Tweet
When you gave me the advice, “I’m not sure it’s such a great idea that you personally guarantee a $1 million loan with Wells Fargo. As your attorney, that’s probably a lot of risks. You should consider that carefully.” I did it anyway. You then helped me figure out a way to pay it off. Fast forward to starting our incubator prospect health, column, and then helping us through the transaction of selling that to another business.
There’s been a lot of companies that came after that. If you think back to that first meeting in that Starbucks in Oakland, what pattern was evident in me as a founder, whether it would be crazy, too much energy, totally close, or naive? Whatever it was, how do you decide when you meet with a founder that this guy or gal is somebody that I should take an interest in and help them along the way?
You’ve had various things that get passed the initial ideation phase, The common theme of folks who get past that first stage, such as yourself, is the energy level. There’s a clear separation between the founders who are passionate and energetic about what they’re doing. There is the other category which is a thing that I’m working on. It’s not there.
With that, there is a clear divide already that you can tell. It’s going to show up when you pitch for money and you interact with potential other collaborators. The passion and the energy are significant differences. I know you, Jeff. You put a lot into anything that you do. It’s there. A lot of other folks don’t have that. I get excited when I see and interact with people like yourself who have that energy. It’s often a good early indicator of potential success. If you can’t get excited about whatever it is, it’s probably something that you should think about a little bit more.
What is interesting, especially on the heels of the last episode with a VC, is that venture capital is difficult to go out and raise a fund. Dave Cash from Medvest described that in the last episode. He goes out, trying to find these investors that are willing to give a portion of their investable capital to him to manage so that he can make good decisions.
Dave did a great job talking about how he likes to help founders and support them along the way. that is similar to what you’re describing in your practice. The difference is, as a VC, you’re being paid a management fee for some percentage of the fund you raised. You can meet with 100 founders or with 5 founders. Ultimately, the form of compensation is the management fee and a percentage. When the fund returns a profit, the VC gets a portion of that.
In that case, the VC has to be very careful of how she allocates her time. Ultimately, they need to deliver a return not only because that’s the deal with the investor, but it’s also how they get compensated. What’s different, and what I think is interesting and possibly underappreciated, as an attorney, your partner, co-chair of a big practice in the firm, and your time is billed.
As a law firm, there’s an expectation. I’m not speaking specifically to Dorsey, but attorneys have to bill a certain number of hours. As a partner, when you think about the hours that you could bill for the work that you already have, you’re going to go out and meet some founder that you’ve never met, not even sure if what he or she is doing is remotely viable. You’re making a pretty big investment.
When you then decide to say, “I’m going to help this company organize and create a corporation,” and that engagement letter is signed, Dorsey & Whitney is allowing you to go ahead and start billing your time. Many of those companies are never going to be able to pay those invoices unless they’re able to raise capital in that first financing, seed round, or convertible note.
What’s interesting and I don’t think attorneys get enough credit for is when you decide to bill 5, 10, 20, or 30 hours to help a founder put together their first financing, you’re risking your time and the firm’s ability to collect. If you think back again to when we met, is your bar higher now because of how busy and successful you’ve been, or do you still approach it the same way?
I don’t think that the approach is too different now than before. We still need to judiciously spend time on things that we think will pan out. Although we are not as good as venture capitalists, I would otherwise do that. The choice is there as far as what you spend time on. You look at different prospective clients as basically opportunities that hopefully will move through the different stages of a company’s life and have an exit transaction.
As you noted, we bill our time and get paid by the hour. The companies that will have a longer life or a future are more desirable. If you spend all your time on a bunch of companies that won’t go anywhere, that’s going to be a huge problem because you will not have a pipeline. The firm’s resources would be tied up on things that are less attractive.
I have partners within our firm. They do things that are different. For instance, we have litigation partners that don’t necessarily need to go and talk to different companies because a case happens, and then, it happens. You have to spend the legal dollars. There’s less “prospecting” that they have to do. if I don’t prospect appropriately, I’m hurting my partners effectively. It’s important that I look at things with at least a bare view of what the potential outcome would be.
This is a good point. To give some perspective, from the client-side about Dorsey, when Providence started having some success in raising capital, we had access to all the great firms of which Dorsey is high on that list. As a founder and CEO who’s making that decision, Dorsey’s history and roots are all in healthcare. The firm works with MedTech startups and life science startups.
The client base includes some of the largest insurance companies in healthcare. Clients include some of the biggest hospital IDN systems. Because of their MedTech client base being small companies like Providence and the large strategics with also a big practice in venture capital, as the buyer and choosing the service aside from it being Evan, who I would follow to any firm. What Evan described with his litigation partner is Dorsey does have the full service.
If we have a complicated regulatory matter that has to do with something where a firm has to understand healthcare. The specifics of that business that we’re in, that’s Dorsey. That’s worked well for us. There are a small number of firms that have that breadth, specifically within healthcare. For healthcare founders, when you think about the law firm, and ultimately the partner who is going to be your primary contact, my opinion is that one, be comfortable with the partner, the associate, your primary contact.
Make sure that the attorney and you have a good fit. A good fit is defined as it’s easy to communicate. When things are good or bad, they’re one of the people you want to call. You want to make sure you enjoy making that call. The second is founders get into all sorts of situations. This is unique to Evan. Evan talked about the energy and passion that he’s looking for in founders. What I look for in attorneys are creativity and resourcefulness.
Like medicine or accounting, law is a profession. Also, like medicine, it’s based on precedent. There are laws. You have to have a base understanding of the profession. However, the additional value-added is creativity. The number of situations that I’ve gotten into where Evan’s understanding of the law, not just where the law is but where it’s likely going, being able to put that in the context of whatever situation I was in, and then synthesize this information and come up with something creative. That worked for all the stakeholders. That is what you’re paying for an attorney.
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When selecting a partner, my suggestion is you should research the firm. Make sure that they have great rankings and it’s a brand that people know. Ultimately, you want to make sure the individual that’s leading the team of resources at the firm cares about you, is someone that you get along with, and above all, is creative in how they apply the law to your specific situation.
That could have a major impact on the outcome of your company. If you think about when you started your legal practice, even pre-Dorsey, then the decision to join Dorsey, and ultimately become a partner, what was the problem you wanted to tackle? What was the thing that motivated you the most? Why do you think you were the right person for that problem?
I wanted to have a niche in developing fast-growing healthcare companies. I was in the 2000 dot-com bubble recession at the time. I was originally a tech-side guy. I have a Computer Engineering degree. With that recession, I got pushed into healthcare by accident in some way. That was where things were going on. I saw how the companies are able to help patients.
It was the most important thing, which is having good health. That was empowering and exciting. I wanted to find companies and help those ideas come along so that they can help people. It’s a little bit better feeling for at least us lawyers to have companies that help people than companies that make a lot of money. Hopefully, you can do both. That became a core theme of why I do what I do. It’s been very good and very satisfying.
It reminds me of a quote coming out of the dot-com correction. The quote was, “The greatest minds of our generations are applying their intellect to get people to click on ads.” That had to happen because all those technologies and business models came out of the ad-driven search business. It’s enabled a lot of additional innovation.
For founders that have been doing research in machine learning, taking machine learning to the next level to some semblance of real artificial intelligence, or people that like genetics and think that they could do genetic sequencing or personalized medicine, that is what’s exciting, when bright people with a Computer Engineering background, smart enough, and disciplined enough to learn the law and being able to practice law. When people start realizing that not only can they make a good living in healthcare as they could in any other industry, hopefully, the knock-on effect becomes the why.
We spend a lot of time in our careers. We all have things that we need to do, families, responsibilities, and obligations. There’s a reason we work. When we can look at our time, whether it be 1, 2, 10, 30, or 40 years and look back on our careers, and in your case, Evan, 100s of companies that you’ve provided advice and counsel to.
If every one of those companies had only helped 1,000 patients, you’re talking about hundreds of thousands up to a million people that your skill, your abilities affected their lives. That’s what it’s all about. That’s why healthcare is where I’m going to stay. Let’s move on to the second session. I want to learn a little bit more about you. This isn’t psychotherapy but where were you born? Tell us about your brothers and sisters. Tell us about your early childhood and leading up to becoming the legal powerhouse that you are.
I was born in Hong Kong, which is a little different. I grew up there for a good number of years. I was probably fourteen when I left. I went to England for a little while for school. I then went over to Atlanta at Georgia Tech for Computer Engineering, and then to law school in Virginia. In hindsight, what was interesting is that all these experiences all over the world give you some ability to perceive how people behave and see the room a little bit differently. It’s been useful and hard to quantify. I’ve been all around the world effectively. My sister and my family are no longer in Hong Kong. It’s been an interesting journey around the world if you would. We live now here in Palo Alto, which is fantastic.
I did a semester abroad in Hong Kong and interned for an investment bank. My impression of Hong Kong is, “What an amazing hub of capitalism.” There is so much trade and people from all over the world. It was one of the first truly cosmopolitan global capitalist cities. There’s also a lot of diversity where you have people from different parts of the world and a strong, proud, and vibrant Chinese culture, but also a degree of independence. That is something to be celebrated. If you think about going from being born up to being a teenager, what was the transition from Hong Kong to London?
It was interesting. I wanted to be away and pursue a way of life that I was running it. There wasn’t the usual shock, homesickness, or whatever it is. It was an adventure. It was cool and empowering. I remember going up to open my bank account by myself. I was fourteen. That was super cool. You then get the little card and you’re like, “This was fun.” It was a hugely empowering journey. I wouldn’t send any of my kids to do that. It’s crazy now in hindsight. It was a lot of fun. It was an enjoyable journey around the world. I don’t even know how we’re going to ever do that. It’s hard to imagine.
You go from London, which is one of the greatest cities, to Hong Kong, a global city, to London, another global city. There’s cosmopolitan, diverse culture, tradition, and history. Tell me about the transition from London to Georgia.
It’s a different type of universe. Atlanta was an excellent metro area. It’s smaller than the previous location. For college, it was a good learning environment. It was like a college town within a metro area. You had access to a lot of things. It was also important. I learned a ton and met a ton of great people. It was a good time, not at all unhappy enough about that.
To decide to study computer engineering in the ‘90s was forward-thinking. How did you know that was an area you wanted to pursue?
I was always playing video games at the time before college. Playing on it was a natural thing and, “Let’s go do something about it.” That was why. That’s not where everything ended up but it made sense at the time.
Walk us through the decision process where you’ve got this degree at Georgia Tech, one of the best engineering schools in the country, and you decide, “I’m going to apply to law school.”
There was a little bit of an economic change in terms of 1997 to 1998. It was unclear that the dot-com boom was happening. I didn’t know if that was what I wanted to do. I made a conscious decision to delay coming into the workforce. It was like, “Let’s go do law.” It seemed like it was an enjoyable thing to do. It wasn’t an explicit design like, “I wanted to grow up to be a lawyer.” It was a delay of entry into the real world, which was enjoyable for three years. It was only time later.
That reminds me of an earlier guest, Dr. Bruce McCormack. We talked about the same concept. When he was at Brown, he liked Life Sciences. He had a natural interest. His father was a dentist. The way he described it is that he knew going to med school would be a platform. He could do this, get a medical degree, and at the very least, it would broaden his exposure to opportunities.
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The job market is uncertain. Who knows where computers are going to go? Why not learn to practice law? You apply to all these law schools, you get the letter, University of Virginia, Charlottesville, maybe the most beautiful campus in the United States. What was it like to get that letter and tell us a little about those three years at UVA?
It was not the most straightforward story. I don’t think I got the letter until late. It was between that or somewhere else. I remember the schedule being extremely compressed and then showing up in Charlottesville by driving up from Atlanta completely unprepared. It was the first time of the big, small-town college campus feel. It was an environment where the law school is in its standalone universe. You’re locked down and focused. It was fun. I echo that whole platform remark. It was one of those where, “Do this,” and then there are still many options thereafter. It wasn’t necessarily by design that, “Go do this.” There are many things you could do.
You think about your career when you’re in your 20s. You’re in the gathering stage. Whether you decide you’re going to go learn Medicine, learn Law, become a CPA, learn Accounting, maybe do sales, or be a trader, it’s not like it’s the last stop of your career. As a father, when I talk to my boys, I tell them, “You have to take the next step whatever you do.” It was the advice given to me.
“You got to be all in. You have to learn, meet people, and gain experience, but never stop thinking about the future of where everything is heading.” I have to ask, and then we’ll move on to the next section. At thirteen years old, you move to one of the biggest cities in the world on your own to continue your studies. It was invigorating. You were independent. You were suddenly out on your own.
You’re tackling a lot of challenges as a young man. You then follow that by moving to the United States, Atlanta, and Charlottesville. As a parent, and for any parents that are reading, or people that would like to be a parent one day, how should we all think about that when we make decisions to protect our kids? As a father, I want my kids to be safe, but how do we balance that need for them to be safe by letting them fly off to London at thirteen and go become Evan Ng?
At least I want to provide information about whatever it is, whether it’s something that I know or something we can get information on. When an issue or a need comes up for your kid, the information is there. Ultimately, they may not choose the path that you want to prescribe for them. At least, they choose it with some baseline information that is fair and available. It’s probably more difficult to impose on kids or teens, or whatever have you these days anyway, so you barely present the choices and see what happens. Anything else is going to be too difficult these days.
Thanks, Evan. Before we wrap up, we’re going to go to the vault. The first question I want to ask is, what is something you read, watched, or heard in any format that had a significant impact on how you view the world? How has it changed the way you approach life or business?
This was within 2019. It’s Bad Blood by John Carreyrou. This is public. Our firm is involved with the Theranos estate. When a company winds down, there are also legal matters to deal with. That caught my attention and want to read up more about it. What is interesting to me after going through the book is how easy that could have happened with any client. I saw snippets of the documentaries that are out.
It’s a little bit shocking and scary to see how it happened. It’s difficult. That has caused a little bit more skepticism as we hear about new opportunities. Maybe that’s not a great thing because that doubt is not exactly welcomed in some quarters. A little healthy amount of skepticism about the next great thing is probably a good thing after seeing what had transpired.
Next question, throughout your life, other than your parents, who is someone, a teacher, mentor, coach, partner, or friend that person saw your potential, took an interest in your development, and provided consistent encouragement throughout your career?
There’s this old lawyer in Dorsey whom I met when I first joined the firm. I sat down in his office. His name is Ken Cutler. He was the then Chair of our Emerging Company practice in Minneapolis. I had not run across the table from them at the time, but he represented all these great MedTech companies out of the Twin Cities. I went into his office, sat down, and chatted about practices. He had all the cool tools from the clients displayed in the back. It was impressive. Over the years, he provided great guidance. We do roughly the same things. He’s since retired, but he’s been particularly great. When I joined Dorsey, I was not yet a partner. He was a big contributor to my advancement. That was a big thing.
Since starting your practice at Dorsey, what is the biggest new healthcare problem that you’ve seen? You see it over again, can’t stop thinking about it, and believe it needs to be solved? It doesn’t have to be therapeutic. It could be anything.
This is not necessarily the biggest problem. This is a completely selfish thing. My son has an allergy to peanuts. It’s getting solved. There are new approvals are coming for the OIT micro-dosing and treatment protocol. I don’t know how it came about. I have no idea about the cause. It’s a thing that’s pervasive and affecting us continuously. I have personal hope that someday that’s completely gone. Other than that, hopefully, we get out of this COVID universe. That’s a whole different thing, those are immediately coming to mind.
On the other end of it, I see clients with exciting stuff. I can’t wait for the product to come out and hopefully change the way things are done. Your company at Providence has lots of cool stuff, but we have a few others. Machine learning-based things are exciting and interesting. We have people who are on the verge of predicting treatment paths for different, more complicated diseases that historically, there hadn’t been that attention. It’s exciting stuff, and I’m hopeful that some of those things work out.
What software tool or business service do you use almost every day, and you can’t imagine living without?
The best description would be this list of things that we use, it’s probably not too different from your day-to-day. It’s the usual Zoom and Outlook/Office Suite. We use something called Capture, which is a capitalization management tool for all our clients. We maintain the client’s stock and options data on that. That’s a frequent, but probably not-so-known item. Nowadays, it’s Zoom and the like for the rest of it. It’s not super technologically advanced to practice law, but it’s okay.
Last question, what is your biggest unmet need at Dorsey?
We need more investors to jump in on to the early stage of MedTech and life sciences, in general. It’s always difficult to get that step out of the way for founders. We know quite a few early-stage investors, but there are never enough of them. In this upcoming new way that we’ve talked about and companies getting started, there’s going to be a tremendous need for capital.
Historically, what we have seen in the downturn environment is that at the beginning of the downturn, you have capital going towards existing solutions and companies to bolster their status and financial standing. You don’t see a lot of capital coming into the space in the early stage. You also don’t see the exits so that capital that wants to get a financial return. They’re not coming yet.
There’s typically a gap in the down economy. This is going to be one of the more significant challenges over the next 18 to 24 months. Hopefully, there are people who are not plainly motivated by a financial return but also motivated by having that double bottom line of getting the financial return and helping potential patients. That would be a good place for people to try and put their money.
You heard it here, Bad Blood, create some additional skepticism, nice balance, Ken Cutler, a Senior Partner at Dorsey & Whitney always had your back and was a mentor. Evan would like to see peanut allergy solved not only for his son but for everyone. He couldn’t live without Zoom and Capture to manage cap tables. Finally, the biggest unmet need in his practice at Dorsey is we need more early-stage investors in life science and ultimately, more exits. Evan, I can’t thank you enough for being a guest on Unmet Need.
Thanks, Jeff.
Important Links
- Bad Blood
- Dorsey
- Dave Cash – past episode
- Dr. Bruce McCormack – past episode