289 | Advice from a Leading Social Enterprise Law Firm with Anusha Kakani
Our guest this week on the pod is Anusha Kakani. Anusha is a startup and social impact attorney and Harvard Law School alum who co-founded Radicle Law on a mission to use law for social good. Her practice focuses on social entrepreneurship and covers diverse industries and a broad range of general corporate and transactional matters, including VC financing, strategic transactions, public offerings, corporate governance matters and regulartory compliance.
This episode is sponsored by the coaching company of our host, Zelizer Consulting Services.
Resources mentioned in this episode include:
Advice from a Leading Social Enterprise Law Firm - an interview with Anusha Kakani
NOTE: While it’s not perfect, we offer this transcription by Otter.ai for those who are hearing impaired or who don’t find listening to a podcast enjoyable or possible.
SPEAKERS
Anusha Kakani, Paul Zelizer
Anusha Kakani 00:00
Hi listeners. Of course, as a lawyer, I have to start with some legal disclaimers. So everything I say today is not legal advice. There is no attorney client relationship between me and any of our listeners. This is just for informational purposes. And this is my personal perspective.
Paul Zelizer 00:18
Hi, this is Paul Zelizer, and welcome to the Awarepreneurs podcast. On this show, we dive deep into wisdom from some of the world's leading social entrepreneurs. Our goal is to increase your positive impact your profitability, and your quality of life. Before we get into today's topic, I have one request. If you could hit subscribe and do a review on your favorite podcast app that helps more people learn how to have a positive impact through a values based business. Thank you so much. Today, I'm thrilled to introduce you to Anusha Kakani. And our topic is Advice from a Leading Social Enterprise Law Firm. Anusha is a startup and social impact attorney and Harvard Law School alum who formed radical law on a mission to use law for social good. Is that even a thing? I guess it is we're going to find out about that today. Her practice focuses on social entrepreneurship, and covers diverse industries and a broad range of general corporate and transactional matters, including VC financing, strategic transactions, public offerings, corporate governance, matters, and regulatory compliance. Alicia, welcome to the show.
Anusha Kakani 01:32
Hi, Paul, thank you so much for having me on.
Paul Zelizer 01:35
I am so glad to hear that there is a social impact focus law firm like we need you all. And we're so glad you're here. I've seen some real train wrecks in this space, from folks who you know, kind of didn't put a strong legal foundation in place. And I'm so glad to get your feedback and your suggestions about how we can really take care of ourselves as social entrepreneurs doing work and like these important but not always easy spaces, like we can maybe hit some legal stuff a little bit more than your average business. And I'm so glad you're here.
Anusha Kakani 02:08
Thank you. Yeah, absolutely. You know, that's exactly our goal is to make legal services really accessible in the space, because there's not that many people doing it. And there's obviously a lot of questions. I think, particularly social entrepreneurs are probably intimidated by all of the corporate law. And, you know, we want to make all of that easier, especially for people that are trying to do good. Yeah.
Paul Zelizer 02:33
So this passion, the way you all talk about it to use the power of law for good, like, how, what's a little bit about somebody would want to know about your backstory, that how did you get interested in that intersection of changemaking and law?
Anusha Kakani 02:51
Yeah, so I have been interested in the social impact space for as long as I can remember. But I would say a really, formative experience for me was, my mother actually started a nonprofit when I was in middle school. And so I have been helping with that nonprofit. It provides homes for children in India, that are street kids, completely destitute. And we give them education, food, love care of a mother and see them succeed. And I've been involved in that organization since I was a little girl. It's called soft kins organization for kids in need. And I've grown up with that. And it's really indoctrinated a sense in me that everyone has the obligation to give back. And I've sort of carried that throughout my whole schooling, my education. In undergrad I majored in international development studies, because I was so interested in how do we bring everybody up, just, you know, have the rich get richer and the poor get poor. And that also led to me wanting to go to law school, and I wanted to pursue business in human rights. As I started to practice law, after law school, I realized that there isn't really a niche for this. And the more I tried to get involved in it, I realized it's really more of a corporate law practice where other firms are just, you know, polluting. These buzzwords, like social impact. And I just found myself getting further and further away from the passion that I've had my whole life. And that that's when Serena Woo, who's the co founder of radical law, and was, was my roommate in law school, we reconnected and she is very much into the psychedelic space, also very impactful in holistic health care. And we both decided, you know, rather than waiting for the opportunity to come along, we're going to create this opportunity ourself, and that's why we launched radical law, because we wanted to sort of forge our own path and create a space where we can practice in this niche of of social impact law. So I would say the passion has just been there for for such a long time. And you know, now I feel like I'm fine they'll be able to create my own career trajectory out of that passion.
Paul Zelizer 05:04
Love that you aren't just waiting for it to come along. But you're going to go create it sounds like a social entrepreneur mindset to me. So you are your Sarita didn't just go to any old law school, I believe you went to a law school that maybe our listeners have heard of. Can you tell us a little bit about that? And how much did you hear about some of these issues when you at Harvard?
Anusha Kakani 05:26
Yeah, so interestingly, not we were at, of course, Harvard Law School, an amazing place. And, and, you know, we, when we were in law school, there was a lot going on. So it was the start of the Black Lives Matter movement. I have vivid memories of going to the protests, and we had citizens where students wouldn't leave the main hall of our law school for four months. At the same time, they were all the divestment, protests. And Apollo, I don't know, if you if you follow the news, your listeners might know this. But Harvard last year, finally agreed to divest a lot of investment that was, was in fossil fuels previously. And so basically, that movement, which had started when I was in law school, it took many years, but it did eventually result in that social change. So when we were in law school, the students were extremely active, and extremely progressive in terms of their thinking and trying to change things, not just at the law school, but even beyond. And Serena and I were roommates. And you know, if you told us them that we would have launched a locker room, we would have like laughed in your face not believed you at all. But we got very close and law school. And we actually both were part of the first cohort of the social enterprise Law Association. One of our friends had formed that and we helped with some of the programming around that. And we were just starting to create awareness about what is social enterprise. So all of that was quite new when we were at law school. So it's really full circle that you know, we were part of that stuff, enterprise Law Association. And now we have that law firm.
Paul Zelizer 06:58
Oh, cool that. I didn't know that that happened in Harvard. But the students and the grad students and the faculty here I live in Albuquerque, New Mexico, listeners, you may have heard me mention that before. If anybody doesn't know much about the America, the New Mexico economy, we are one of the proportionately oil, biggest oil and gas and energy sector economies matter of fact, in 2022, because oil prices went up, so why the our legislature had to figure out what to do, we had billions of extra tax revenue, because oil and gas you know what, you go back a year or so gas was like, almost $6 a gallon, and you go to California was like almost $1 to get 750 or something like that anyway. So in a state where the very much biggest 800 pound gorilla in our economy was oil and gas, the University of New Mexico, the students and the faculty also launched an initiative to divest the state funds, retirement funds from oil and gas, and they won even in a state where the huge presence and we have a relatively anemic economy, that was a huge deal. So I know that that's very much something that's happening in campuses across the country. Congratulations, Harvard. That's wonderful to hear.
Anusha Kakani 08:14
Absolutely.
Paul Zelizer 08:15
Yeah. When did you all graduate law school?
Anusha Kakani 08:19
We graduated in 2016 2016.
Paul Zelizer 08:21
So 2016, you graduate law school, and you didn't immediately? All right, the first thing out of the gates is you you didn't go right into social enterprise, you had a little bit more of a traditional flavor of laws and that fair to say?
Anusha Kakani 08:35
That's right. That's right. I went into corporate law. And, you know, not that I forgot about all of this stuff. But I was told that a lot of law schools will tell you to go to big law firms first, you know, get trained. I think that's the becoming, you know, less common, I think there there more options for people increasingly to go directly into social enterprise these days. But, you know, back when I when I graduated, it was still more in the realm of nonprofit charitable giving, grant making, and social enterprise wasn't as popular. So right, when I was doing corporate law, these new forms, got introduced the public benefit corporation forum, so I immediately jumped on that. So even when I was doing my corporate law job in New York, I jumped on that forum, I started talking to people, Hey, is anyone talking about this, and I was able to get stopped on a client that was a regular corporation, but thinking about converting to a public benefit corporation. And so you know, I I got introduced to that right when it was was introduced, and I was able to learn more about it. And I, I started attending social impact and impact investing conferences. So that so i Even though I was doing corporate law, I still maintain that interest and that passion for social impact. And that's what precipitated me leaving ultimately, because I knew that there was this growing industry out there.
Paul Zelizer 10:00
Yeah, that's one of my favorite strategies that I share with people who aren't quite ready to go full time into social entrepreneurship. And I say to clients all the time, do everything you can to get paid to learn, right? So so you have your job or you know, whatever your position is. And maybe it's not full time. But as much as you can lean in that direction, while you're still in full time employment, or whatever your contract is, there's likely something that's adjacent or in the direction of something that will help you bridge. And if you can get paid to learn, that is an incredible strategy that I always ask my clients is there any way if you're not ready to jump immediately, that you can get paid to learn? So thanks for bringing that up. And I hope listeners that would be something if you haven't yet fully jumped in totally understand that it's a big jump, and not everybody's ready to go full time. If you can get paid to learn that really helps. So thanks for bringing us that strategy. So So you did corporate law for a while you leaned in as much as you can get paid to learn. And then at a certain point, you and Serena reconnect, and you say, life short, the world is on fire, we need a social impact law firm. Tell us a little bit about those conversations, like what were you all, when you were envisioning this firm? What were you all talking about? What were some of the needs you saw that you really wanted to address?
Anusha Kakani 11:27
Yeah, I think there's a few different needs. One need is really an accessibility. And I think that's because when you're in big law, you know, you charge these higher rates, and it really prices out a lot of people. But particularly, there's an impact on diverse entrepreneurs, there's an impact on social entrepreneurs, on people that might not be so profit focused, that they're not necessarily making enough money to be able to hire these kinds of attorneys. And what that results in is, is that only certain select few people can be successful entrepreneurs. And those of us that just didn't sit right. So that that's one one need we want to solve. And the way that we do that is that we just have transparent and lower pricing than other law firms would. Because we're trying to be accessible. Another way we do that is we specifically are targeting trying to help diverse entrepreneurs who are oftentimes, you know, sort of at the edge of the conversations don't have a seat at the table. So that we can empower them to achieve their goals. Another need that we see is, is really around educating it. These topics are so new, right? So I use the term ESG a lot. A lot of people don't even know what that stands for. So you know, listeners who might not know it's environmental, social and governance, and it really refers to a set of rules and guidelines and reporting requirements that are sort of emerging now based on different government agencies or inter governmental agencies that basically set the framework for how you're supposed to view social impact. And so what is that event, right? So there's a big education piece of it, that we also want, that we see a huge need. And we want to address that need by educating people about what these things are, how they apply, you know, to your individual business or to your individual idea. So there's a big education piece as well
Paul Zelizer 13:22
as love that. So accessibility, diversity and education. And then that last bucket Anisha, you're talking about ESG. And, and one of the things that in the social entrepreneur and like impact networks that I'm a part of, there's a lot of conversation right now, that about people getting called out both from the market and also by regulatory governments and other regulatory organizations. They're using language about positive impact and other ESG frame sustainability. And they're getting called out and some cases and pretty stiff penalties are happening here in the US. You mentioned before we have record, there are some new regulations around ESG and what that means and who can use it, and when you're using it out of integrity. Tell us a little bit about that.
Anusha Kakani 14:14
Yeah, absolutely. So I mean, the term that's been used pretty widely as greenwashing. And there's a lot of focus on it now. I think the reason we are where we are today, one of the reasons is is you know, we open the floodgates by introducing these new corporate forms, but the forms alone don't really achieve, you know that much. What they do is they allow each company to, you know, put forward a public benefit, let's say that they're trying to solve for at the same time they are allowed to consider profit of investors, right, and they're allowed to actually put profit before that impact. There is no requirement that social benefit has to come before profit, right. So within that system, there's a lot of risk and potential for people Using these PVC forms to look like they're doing something, but at the same time, they're not legally obligated to actually do anything. And so that's where we've seen more of these legal disclosure requirements come up around, okay, well, what are you actually doing, you need to tell people what you're doing. And over time, there's been different standards that have emerged. So most recently, in the US, the SEC has introduced rules around climate change reporting, for example, there's a few other pieces of legislation the SEC has introduced, there's some that are right now in the comment period, so they haven't been finalized. But looking at those ledges, those proposed rules will still give you an understanding of you know, what might be coming down the pipeline. But you know, these rules are really about what what are you doing to combat climate change, you know, reporting around emissions. And, and the problem there is, the SEC is taking a piecemeal approach, right, so maybe this year, they're focusing on climate change. Next year, they might focus on human capital and put out more requirements. So it's an ever changing and evolving landscape that is really emerging now. And so my, my main takeaway there is, you have to stay up to date with everything that's going on, and in a way that allows you to be dynamic. So what I mean by that is, let's say, you know, this year, they're focusing on climate change, how are you going to be able to follow those rules, you have to first understand those rules, but you also have to have a way of collecting the data within your firm of how that that rule applies. And then you have to have a way of analyzing that data and being able to present it so that you're publicly disclosing all of that. And then let's say that rule is changed, you have to have a way of, again, collecting new data, again, analyzing that data and presenting that data. So what this really means for companies is that you have to build out, you know, systems and processes now, because once the disclosure requirement is in place, you're not going to be able to overnight, by right, you're gonna have to already know the data, you're gonna have to already collect the data and analyze it, so that you can present it. So it's much more data and guidelines approach to process because you want, you want to make sure that the data that you're collecting, and you're analyzing is according to an established, you know, guideline or procedure that somebody's using.
Paul Zelizer 17:21
And I'll give an example and social media, LinkedIn. Yesterday, there's a lot of conversation going on, not in the US, this was a European, a very well known European airline, that was got some pretty stiff penalties, they were making some big claims about sustainability. And if anybody knows anything about the airline industry, there's a lot of carbon associated with jet fuel, you know, jets burn a lot of fuel, and that has a lot of impact. And they were making some big claims about, you know, how they were doing it differently, and how sustainable they were. And when people look carefully at the numbers, it didn't measure up, and they got some pretty stiff penalties. And that's just one example of many that are happening. And so I guess what I would just say, for our listeners, be really careful when you're making claims about sustainability, about carbon, about how, you know, recycle a bowl, how much you know, circular economy, your product is because we've seen people make claims that when folks dug in a little deeper, didn't stand up. And sometimes it's market backlash. And sometimes it's outright penalties. So just, you know, be thoughtful, and definitely get some legal support before you're making big claims that aren't carefully substantiated. Is that fair? Is that good advice?
Anusha Kakani 18:47
Really, that's great advice. And you know, beyond that, I would say if you're, especially if you're an international company, you've got to worry about not just the US rules, which are not as stringent as the rules in the EU, for example, and the EU rules, even if you're not a European company, if you're a US company, but you have presence in the EU, according to certain threshold, and you meet that requirement, you're subject to the same EU rules. So you need to be aware of not just you just the US rules, but also what's what's happening elsewhere. So for example, in the US, there's no current requirements for disclosure around pollution, or water or marine resources or biodiversity and ecosystems, but in the EU, there is disclosure around all of this. So you have to set out your what your policies are, what your targets are, what resources you're using. So, you know, it's not just about what claims you're making, but you have to think proactively about what disclosures you might have to make in the future as well.
Paul Zelizer 19:45
So that's one area of focus is to help people really understand legal compliance around ESG claims about sustainability and not just in the US market it It reminds me a little bit of like when new rules Email in the EU, around website compliance and cookies and all that stuff. And people all around the world had to suddenly pay attention, even if you lived in Africa or Asia, because your website could be viewed by somebody in the US, the EU, eu sorry, dyslexic there. And, and you didn't get a break, just if you were a sizable company, and you have an internet presence, and you were doing things in an internet marketing kind of way that didn't meet the legal standards of what was happening in the EU, you were definitely there were very significant American companies that got penalized a lot of money for not paying attention to that. So just make sure you're thinking about your claims, not just in the US because we live in a global economy and the internet, like anybody who has access to the internet can see your stuff that you're thinking about how you're situated in legal compliance in an international basis. What are the other things that we were talking about, I know as a specialty, in what you're doing, and this is something that I'm seeing more and more showing up in the impact space is around fundraising. And when startups are starting to get their legal house in order to do you know, a seed round of fundraising or a Series A, you know, early, like conversations about, hey, we need capital to grow this thing. And that's something that you all have thought a lot about, and are really passionate about, talk to us a little about, if I am a founder, I'm an entrepreneur, and I'm thinking about getting capital, or I am getting capital, but I'm looking to get more, what do I need to do to take care of myself legally and take care of my company?
Anusha Kakani 21:49
Yeah, that's a great question. And we get this a lot? And the short answer is, it's really the same as as consideration as it would be for any corporation, right? So one of our goals is to sort of bring that high caliber corporate law advice that all of these big companies are getting, and tailor that and bring it down, bring it down to a level that works for these early stage, social enterprises. And I would say, there's a few important things to consider. One is, you know, to really think about what your goals are for your company, not just in terms of your impact, but where do you want the funding to come from? Who do you want your investors to be? I mean, your investors are like, long term partners, once they get an investment into your company, they're always going to be investors, unless they sell it or they're bought out. And they'll always have the ability to keep that investment stake in your company most of the time. So it's really important to understand what your goals are, and what kind of company you're trying to create, what kind of ownership structure you're trying to create, what kind of incentives you're trying to create. And all of that should inform who you're reaching out to what funds you're trying to get. And trying to understand. I think what types of equity even are out there? So we get a lot of specific questions around what's the difference between convertible debt and the different kinds of equity, right, there's options there shares, there's restricted stock. So all of these will impact your capitalization table. So, you know, even understand what should my capitalization table look like? What is the capitalization table, even? All of these really big corporate law topics are extremely relevant and important, because they are the same things that apply to a social enterprise.
Paul Zelizer 23:34
Yeah, and if you make some like, Oops, early on, because it's early on, and you know, you decide an equity agreement you land on, pick a number, let's say 10%, right. And looking back, you're like, I wish I had made that 3%. Like the earlier you start the law, that's extra 7% is a really big deal. If somebody gets equity early, and you're like, I really didn't do this, well, you know, five years down the road, the the difference that can make is could Thinkorswim your company. So you know, I just want to highlight how important something like that is. And I know there's a lot going on early when you're in startup and sometimes like Oh, whatever they want to, you know, come in as a partner and join me as a co founder. Great, and you give them equity in there. Oh my gosh, I gave him too much. And now like I don't I barely can pay my bills or Yeah, we like over gave in terms of early, you know, investor and then like later rounds, it's totally messing us up. Because people look at your existing agreements. They're like, wow, you gave all a lot early on. There's not a whole lot left for me to come in later. Why would I do this? So I just want to highlight how important it is to get this right. And when I use right, think of air quotes, you know, right for you. And I see a lot of startup founders who make mistakes with this, and then you know, three Two years, five years, seven years down the road, it causes increasing amount of stress, because like I said, you know, it sound like oh, somebody wants to invest in my company. Yes. And you don't look at the terms in a smart way. And then seven years down the road, you're like, oh, my gosh, did I make a really bad decisions seven years ago, and it's really hard to extract yourself from some of those decisions. So I just want to highlight how important your knowledge is. And I know you're busy founders. And don't skimp on the attention for these kinds of issues, because it can sink or swim a business.
Anusha Kakani 25:39
Yeah, I think the other point there that that's really important is it's a two way street, right? So there are some investors that are going to be really interested in investing in you. But you also have to make sure that you're giving them the right expectations and the right. The, as you say, write what fits right for you in terms of what their involvement is going to be and how much control they're going to have. And one mistake we see all the time is when it comes to convertible debt. Right. So we've seen a lot of safes happening, for example, and there's different structures within that like a valuation cap and a discount. And people don't understand that, you know, a lot of times when you're giving away a valuation cap, you're actually giving away a certain percentage of your company. So how does that all break down? All of that is very important, because it's not obvious from the face of the agreement a lot of times, yeah.
Paul Zelizer 26:35
So much I could say about that. Let's do this. When we come back, I want to talk to you a little bit more about these things. Like for instance, I want to talk about those partnerships and how you negotiate them. For instance, let's say you have a co founder or an investor wants to come on, and how do you make some smart decisions there, and some of the other recommendations you have for our listeners. Before we do that, I just want to take a quick break and hear a word from our sponsor. Are you facing one or more important decisions in your impact business, and you'd like an experienced thought partner to develop a plan about how to proceed in the complex times we're living, but you don't feel the need for an extended coaching or consulting contract that's going to cost you many 1000s of dollars. You're looking for an affordable, targeted, and time efficient type of support. Through Paul zelizer.com, I offer a strategy session package. These packages are ideal for entrepreneurs who are facing one to three immediate decisions, like how to increase your positive impact, fine tune your marketing strategies to get more results for less effort, launch a new product or service successfully, or refine your pricing structure. So it's both inclusive, and provides you with a great quality of life. You can find out more by clicking below. And thank you so much for listening to this podcast. So welcome back, everybody. In the second part of the show unusual, we like to joke about putting on our social entrepreneur glasses. So we also want to understand a little bit about radical law and how you all are set up and who your clients tend to be and your revenue streams and all that. But before we do that, I wanted to ask you this. I know from research that one if there's co founders, one or more co founders with a business that one of the biggest cause of businesses failing in the first five years is co founder conflict and divorce. And I share that partially because I'm a relational human. So I guess we attractive specialty relational like emotional intelligence and paying attention to agreements. That's like something we people know me and my first career was in community mental health. I have a Master's in Counseling Psychology. And it turns out that the research tells us that emotional intelligence and relational intelligence actually is more predictive of how much value you provide in your career and in your business. And then in your heart skills. If you're an accountant, your emotional intelligence is more important to how well you do as an accountant than your accounting skills that would really surprised a lot of people in business. But it turns out, that's true. And I especially lean on that because that's where I started. So I share that just to say, again, that these agreements that you're making, especially early on, and many startup founders have great experience in their craft. What if it's a climate solution, they've really thought about that climate solution or you're a consultant or leadership consultant, you know a lot about leadership. But we don't always know a lot about these kinds of agreements both within the company or like with investors, anything my sense of you initiatives, you're very dedicated to lava, you're also very relational human. Anything you could help us think about as really Rational humans trying to navigate these kinds of agreements, whether with it's a co founder, or an investor, these are these are big financial decisions, but they're also like human relationships, and how do we, like navigate the human relationships part. So that we, what we get on paper is a good fit for who we are as a culture, you know, as a, as a leader, as a founder, and the kind of culture we want to create in our business. Any suggestions there?
Anusha Kakani 30:30
Yeah, you know, we could do a whole podcast episode, we
Paul Zelizer 30:33
could probably write a book about that.
Anusha Kakani 30:36
I think there is such an interconnection and intersectionality between who we are as a person and the work that we ended up doing, right. I mean, you can't really separate the two and in my opinion, and, and I, and when it comes to co founders, right, I think this is something that we personally seen in our clients as well, when things are going great, right? Your your emotions tell you, Oh, things are going great. And we don't have to worry about it, it'll be fine. It'll work out. We're partners, you know, people don't plan for the bad stuff. And that's sort of the job of the lawyer, right? I mean, we're trying to say, okay, in the worst case scenario, is there anything we can do now, sort of limit the impact to you later. And it's really hard to put yourself in that mindset when you're trying to just, you know, work with somebody else, and, you know, be collaborative, and be friendly, and be, you know, open and, you know, you want to sort of set the stage that you both are in this together, you know, all you all are in this together. And it's really difficult, then to sort of negotiate on the other side and say, Well, we have to still plan for the worst. And that's why we think, you know, we say, getting your legal counsel involved early can be really helpful, because you can still keep that positive emotional space, but still let the pragmatism come in, so that you don't, you're not, you know, in a bad position later. So for example, for founders, increasingly, we're seeing what's known as Buy Sell agreements. So ahead of time, founders will agree, okay, if one person walks away, this is sort of how that will happen. This is what you know, they'll get bought out for, and this is the formula we'll use. And that way, there's sort of less fighting later on. That doesn't mean that, you know, the founder still can't sue and say, I want to change the agreement, or I want to do this, I mean, complex, happen all the time. But at least there's some way where you can set aside a process or, you know, put set down some expectations for how things will happen in the future. When it comes to investors, you know, an investor can be forever. So it's not just what economic value that they're bringing. But it's also what are they a good fit for you as a person because you're gonna have to work with them, in the future for your company, are their values aligned with your values, particularly important for benefit corporations and other social enterprise? Because you, you will be giving away control over your company. So a lot of times the way these financings happen, for example, with venture capital firms, you're giving them what's known as preferred stock, preferred stock comes with not just a preferred right into liquidation, if something goes wrong with the company or the company gets bought or sold. But it also comes with control rights. So for a lot of significant board decisions, they'll have the right to say yes or no. So they'll have actual control over the operation and management of your company. So you want to make sure they're aligned with you. And that's why negotiating these investor documents is so important. So one way a lot of investors will get is known as like a pro rata, right. Which means that if you if they invest in your company, for a certain percentage, they have the right to keep that percentage throughout the future. So any future fundraising you do they have the right to purchase? More, more stock so that they're not diluted, and they keep that same ownership percentage. There's another right that's known as a right of first refusal, where you know, if somebody else who's who's a stockholder of the company wants to sell their stock, they have to first give that right to the investors, the investor has an option to increase their ownership stake more than what you've already given them. So there's all of these mechanics that are built into the agreements that you really need to understand because they will absolutely impact how your capitalization table looks in the future and how much control and ownership these investors will have. There's also you know, a lot of investors come in and they want to maybe replace the founder, right? So then there can be protections built in for the founders so that maybe the founder can't be replaced for a certain amount of time or even if the founder is replaced, they'll still have certain ownership and control rights. So there's all of these things that can happen and planning for them and I Understanding what's actually in the agreement, what you're agreeing to it, what you're agreeing to is crucial.
Paul Zelizer 35:06
And just since this is very timely, literally, I just saw today, I can't remember her name, there is a vegan food brand, my young car, I'm butchering her name, I can't remember her name, I can't. I'm so frustrated. I'll put a link in the show notes. But there is a female of color, who started a what became a very robust vegan food brand, who got run out allegations were made about her leadership style and other impropriety. Nothing's been documented, but the board ran her out of her own company, the company's literally named after her. And they ran her out. And she just announced today that she hired a lawyer and the law, the lawyer, the firm that she hired is making the allegation that this was it was improper. And the lawyer is quoting some very robust statistics that women and founders of color and most explicitly women founders of color, get run out of their own companies more often than in other situations. And there's often an economic incentive to do that. So that's a literally in the news today, and gives you another example of why this stuff is really like clear agreements. And you know, being intentional about ownership, and, you know, this was a case of activist, you know, stockholders and a publicly traded company, seeing this is the allegations by the law firm, for the founder, who got run out that this was an, you know, there's economic incentive to run this founder out, because if they were to stick around, certain agreements would have had to be kept financially. So again, just can't highlight enough how important it is to pay attention to agreements. And to make sure you're thinking about who you're partnering with, and what some of the mechanisms you're writing down in your contracts are. So if you have any questions, that's why the nation and Serena, when when you all pitch me to be on the show, I was like, literally jumping up and down. Oh, my gosh, do we need you thank you for being in the world. And I can't wait for the community to hear about this. Because the implications of not paying attention to this stuff creates a tremendous amount of suffering. Thank you for what you do. So and you should tell us a little bit about radical law, like, Who do you tend to work with out of people tend to find you like, and if I'm somebody who's saying, Wow, I want to hear more? I think I might have something I could use your help on? Where do I even start?
Anusha Kakani 37:54
Yeah, so radical law, it's spelled radic L E, I want to put that out there. Because you know, it is a play on words, because
Paul Zelizer 38:04
it'll be in the show notes listener, so don't worry about finding it, you can just look in the show notes.
Anusha Kakani 38:09
Great. And, you know, it's a play on words, because what we're doing is pretty radical from a legal perspective, and not that many lawyers out there doing it. But the reason we're called that is because we're trying to help you grow your primary root, we're trying to help your idea, take root and grow. And so, you know, the clients that we serve are across all different industries, we have a broad view of what impact means because you know, the space is still growing. So not every social enterprise is structured as a public benefit corporation. Now, I'll give the example closest to me, my mom's company, for example, it's not actually structured as a public benefit corporation. And yet, it's absolutely social enterprise. Because what they do is they use their funds to sponsor a lot of nonprofit activity, a lot more than the average company, and then their direct sponsors in the education efforts. And they actually provide a funnel for kids from the organization that are interested in creating nonprofit, creating tech careers, to then go and work for my mom's company. And so there's so many ways companies can do this, right? So there's public benefit corporations as cooperatives, collectives, there's just so many. And there's also so many industries, right? So there's, there's the environmental industry. But there's, there's also a social and a governance aspect to it. So regardless of what specific goal you might have, you know, if you if you if diversity is something that's, you know, important to you, and you have diverse founders, or if governance is something that's important to you, because you're having you have an organization that's democratic. There are so many ways to be a social enterprise, and we're trying to capture all of that and trying to help, you know, everyone who's trying to do social good, and so we don't have an industry that we specifically focus on, but I Um, in terms of what, where the direction is going, we have a lot of tech clients, we have a lot of AI clients, we've got some clients in the holistic healthcare space. So it really ranges and the impact that our clients are trying to create also, you know, vary across different kinds of modalities.
Paul Zelizer 40:20
So if I'm somebody who's like, Yes, this is making sense, and I do want to have a good legal foundation for my company, where would I start with y'all?
Anusha Kakani 40:30
Yes, you should go to our website. And, Paul, I think if it could include it in the notes, that would be awesome. But it's www dot radical law.com. From there, you can contact us directly, we want to hear from you. Even if you don't have a legal problem, and you just want to say hello and establish a relationship, we're always more than happy to get connected with social entrepreneurs, and we're trying to build community. So please reach out to us there. And you know, we'll get the message directly. And we can take it from there. We also have a newsletter that you can subscribe to where you can get updates on basically everything that we've been talking about, and you know, get an update on the kinds of stuff that we're working on. And we have social media, you can follow us there. We have LinkedIn, Instagram. So that's one way to find us. And obviously, Paul, your listeners can come to you as well and get connected directly with me.
Paul Zelizer 41:25
Is it even legal for lawyers to care about connection and community? I guess. Sorry, I couldn't resist.
Anusha Kakani 41:41
Yeah. But But no, I think I think we want to be here for you guys. And in, we want to be here as a resource as well. So so please, please reach out to us.
Paul Zelizer 41:53
So you're doing awesome work. And you've been around for a couple of years now. And talk to us a little bit like if you look ahead three to five years, what what would you like radical love to look like? And what kind of impact would you be wanting to have
Anusha Kakani 42:08
a QA I think we would want to have as global impact as possible, I think we want to be a leader in this space. So we want to be a resource that everybody can come to, we want to be like the ESG lawyers, the social impact lawyers, we want to be investing in our companies as well, I think that's the goal is we not just providing legal services, but to really take a more active role in helping these companies guiding these companies so that they're better positioned for success. And we want to create a community. So whether that's, you know, creating a podcast or having some other way where we can really highlight the work of the social entrepreneurs and get connections between them. That would be great. And, and I think ultimately, this world of social impact, we have to create connections and foster partnerships, because otherwise, we won't have that sort of closed loop system where one thing is leading to progress, and another which is leading to progress and another. Right now, this industry is very, very segregated. And very, like, you know, people are doing one thing on one side, people are doing another thing on another side. And there is a lot of activity happening, but it's very decentralized, it's very sporadic or ad hoc, and we need to find a way to have everything be connected so that it can be a real movement.
Paul Zelizer 43:25
We were talking, before I hit record a new show about I had a fabulous conversation with several impact podcasters, who were podcasting at scale, yesterday, and we were talking about how siloed you know, there's awesome stuff happening, but just how siloed as a sector we are and how we're looking as a leadership group of folks who've been around for a while and have, you know, some community or some following in the space, how he can help sort of tease apart some of that siloing and do some connecting, so I couldn't agree more. So neat, I could hang out with you all day. I love what you're doing and you're busy or listeners are busy. So we'll certainly put all the links that you mentioned in the shownotes. Go check out what they're doing. Go connect with them, folks, I hope you get a sense of how much care and passion and willingness to connect and being community there is here. I'm thrilled you're there's so just say that all the links will be in the shownotes. Before we go any issues if there was something you were hoping that we would get to today, and we haven't touched on it, or there was something you wanted to leave our social entrepreneur founders with as we start to say goodbye, an action step, a tip or resource anything like that. What would that be?
Anusha Kakani 44:52
Yeah, well, first I want to say thank you to you, Paul. I am so grateful for for you You in for highlighting our work. And for all the encouragement and the support. And thank you so much for doing the work that you're doing in highlighting, you know, social enterprise and social entrepreneurs. What all of this means. And I think the educational piece and the awareness piece is crucial. What I really want to leave listeners with is that we want to be your partner, you know, if you have an idea, but you're not sure what to do about it, if you have a business already, but you're not sure how to maximize your your public benefit, how to really bring across that what people are calling the double bottom line, we want to be your partner, we want to help you. So please reach out to us. And I think social entrepreneurs especially feel a little outside of the box. And we're trying to make that more mainstream. So what I want to leave listeners with is if you're intimidated, if you're unsure if you're scared, you don't have to do this alone. And you have a community here that's waiting to help you.
Paul Zelizer 46:01
Minister, thank you for the work you do. And thank you so much for being on the show here today.
Anusha Kakani 46:06
Thank you so much, Paul. It was great. Thank you.
Paul Zelizer 46:09
So listeners, before we go, I just want to remind you, we love listener suggested topics and guests. If you have an idea, go to the AWARE printers website. And right there on our contact page, we have three simple guidelines would be we try to be really transparent about what kind of stories we're looking to amplify. If you read those and you say, Well, I think this really fits, please send your ideas on in a good portion like a very good portion of our shows because somebody who listens and as a part of the community says, I think this is a fair and I want to learn from this person or I want the community to learn. So go to the website, go to our contact page. For now I just want to say thank you so much for listening. Please take really good care in these intense times. And thank you for all the positive impact that you're working for in our world.