Irvin Abraham, a partner in the private equity group at global law firm Goodwin, has made a name for himself as a lawyer with an understanding of the fintech industry. This understanding comes not from being a lawyer, but from many years in operational and management roles at global banks such as Morgan Stanley and HSBC.
By the time he returned to private practice, he had “a wealth of knowledge about financial services that most practitioners don’t have, having been in financial services for five years,” he says.
- 2023 Goodwin, Partner
- 2020 McDermott Will & Emery, Partner
- 2018 HSBC, Global Banking Management
- 2015 Morgan Stanley, Chief Operating Officer, Sales and Trading
- 2012 Sullivan & Cromwell, Senior Associate
“Many lawyers think about legal concepts in the abstract and don’t really understand how they relate to everyday life in the field,” he continues. “It’s not just about how staff operate, it’s also about how the interpretation of regulatory provisions needs to fit into the bank’s plumbing.”
In addition to his work at Goodwin, Mr. Abraham also serves on the Bank of England’s Central Bank Digital Currency Engagement Forum, which helps advise central banks on the potential introduction of a tokenized pound. It is the executive body for the Bank of England and serves as the Bank of England’s leading authority on legal matters. A fintech company based in London’s technology hub Level39. From early-stage to mid-market acquisitions, a topic many of these companies frequently consider is how best to raise and structure financing, he says.
Dig into the details
In his more formal role at Goodwin, Abraham’s clients range from early-stage companies to private equity sponsors and financial institutions looking to invest. These early-stage companies tend to have a wide range of experience, from those that require a lot of support to those with sophisticated founding teams, he added.
“These deals, especially if it’s the first proper financing a company has done, require a lot of hand-holding and going through the basic steps of how to do a deal,” Abraham says. “One thing that helps manage spending is trying to adhere relatively closely to the UK Private Equity and Venture Capital Association standard format. Add to that the need for extensive negotiation, and things get even more complicated. It becomes more tedious and expensive.”
Abraham emphasizes that the focus should be on due diligence at both early and late stages of a transaction, but when the client is more sophisticated (such as a major world bank), that focus becomes more complex and intensive. Become.
“If you are a regulated institution, there are many other considerations to take into account beyond just your direct financial exposure. [such as] reputational risk and regulatory risk,” he says. “If you invest in something that later turns out to be a Wirecard-like situation, for example if there is fraud or fraud associated with it, you will not only lose money, but you will also get into trouble with the regulators. There are also risks.”
I think one of the tensions in the venture industry is the relationship between cost and time pressures and the need to do thorough due diligence on opportunities.
The level of due diligence in corporate ventures and growth transactions stretches legal budgets compared to standard transactions. Cost pressures on fintech startups are a complicating factor as they typically incur legal costs for themselves and their investors. One way to reduce that risk is to work with an attorney who has experience in the field and understands the issues, Abraham said.
“There have been a number of other high-profile failures recently where sophisticated financial investors invested in companies that were found not to have appropriate governance processes in place,” he added. “I think one of the tensions in the venture industry is the relationship between cost and time pressures and the need to thoroughly due diligence an opportunity.”
assets for sale
Currently, Abraham is seeing a lot of difficult activity in the fintech space in general and the cryptocurrency space in particular. This market turmoil is allowing “opportunists” to snap up prime assets at “basement bargain prices,” he added.
However, the area of cryptocurrencies and blockchain is where Abraham feels the future of the industry lies.
“I think blockchain and digital assets, and fintech more generally, have the potential to revolutionize financial services and payments,” he says. “It’s like the Internet has revolutionized many aspects of our lives, and we’ve only just scratched the surface of what it can do.”
Currently, the infrastructure is still developing, but once it’s in place, people will be able to build “great things” on top of it, he added.
Abraham is fortunate to have worked at two different banks and has been able to understand where the risks and pressure points are in financial services institutions. His international experience as a lawyer in both the US and UK also gives him an advantage in working with the fintech industry.
“This broad view of the ecosystem has added great value to my transactional work, and I have gradually built a reputation in this area as a lawyer who understands it,” he says.