Kevin Smith

Good morning from sunny Silicon Valley! Despite a consistent slowdown, global venture capital investment held its ground this April, with a total of $22 billion in funding. Here are some points we can learn from last month's data: 🔹 Seed-stage companies saw $2.4B distributed among 1,000 startups, highlighting continued interest in early innovation. 🔹 As for mature startups, over $10.7B was allocated to more than 150 Series C and beyond companies. 🔹 Biotech and healthcare led the funding race with $5.7B, representing 26% of the total investments. AI followed with notable advancements, including a notable $1B funding round. 🔹 The IPO scene showed signs of warming up with significant entries, signaling a cautious yet optimistic outlook towards receptivity within the public market. 🔹 Generative AI is continuing to shape the landscape, benefiting established tech giants and new companies alike, and emphasizing the transformative potential of AI across sectors. As we move forward, these trends will likely dictate the pace and direction of innovation, making this an exciting time to be involved in the tech and venture capital space. Check out this Crunchbase article for more - https://lnkd.in/gk_HD2xf #mergersandacquisitions #venturecapital #innovation #artificialintelligence #fintech #techlaw #foleyforward #garage2global Foley & Lardner LLP

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For a discussion of the costs associated with the ever-increasing burden of California's regulation of data privacy, see the article below that my colleague Alan Friel and I wrote for Bloomberg. #privacylaw #TeamSPB

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CRV's recent decision to return $275M from its later-stage Select Fund highlights the growing caution around inflated valuations. As capital becomes more selective, this move signals a recalibration, especially for late-stage startups where liquidity is tighter and exits are delayed. While this news centers on a later-stage fund, we may also see new early-stage funds raising less capital going forward. With a more conservative approach across the board, founders at all stages should expect increased scrutiny and a more measured funding environment in the near term. https://lnkd.in/grG7u_KK

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Career development is an important topic for all new and emerging attorneys. These conferences will tackle important issues in growth and leadership.

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🚀 Exciting News: LawDroid is Heading to Legal Innovators California! 🚀 I am thrilled to announce that LawDroid will be featured in the inaugural Start-Up Gallery at Legal Innovators California this June 4th and 5th in San Francisco! 🌟 What’s Happening? Legal Innovators is launching a new 'Start-Up Gallery' where early-stage startups showcase their groundbreaking products and share their visions. It’s a fantastic opportunity to see firsthand the future of legal technology. 👥 Why Attend? Join us to explore innovative solutions and fresh approaches to overcoming the legal sector’s biggest challenges. Whether you’re looking to network, find potential collaborations, or just stay on the cutting edge of legal tech, this event is for you! 📅 Mark Your Calendar! Don’t miss out on this chance to connect with thought leaders and changemakers at the forefront of legal innovation on June 4th and 5th. ✨ Visit Us Stop by our booth to learn how LawDroid is transforming the legal landscape through automation and AI. We can’t wait to meet you and discuss how our solutions can benefit your business! 🎟️ If you don't have tickets yet, buy them now: https://lnkd.in/gmEWHkP7 Let’s innovate together! See you in San Francisco! 🌉 #LegalInnovators #LawTech #StartUpGallery #LegalTech #Innovation #SanFrancisco cc: Cosmonauts Richard Tromans

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Orrick assessment of proposed CFIUS rules. A leap in the progression of CFIUS from merely a transaction-screening body to a more conventional regulatory and enforcement body. https://lnkd.in/dARuwJVr

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When Overreach Meets Accountability: 🗽SEC's Dealer Rule Vacated on the Day Gensler Announces Resignation🫡 🔄In a poetic twist of fate, Gary Gensler's SEC tenure ends as the courts deliver a decisive critique of his regulatory overreach. On November 21, 2024, Judge Reed O'Connor of the Northern District of Texas vacated the SEC's controversial Dealer Rule, a decision that reverberates across crypto and financial industries. On the same day, Gensler announced he would step down as SEC Chair effective January 2025. 🛡The Dealer Rule: A Step Too Far The SEC’s Dealer Rule attempted to redefine “dealer” under the Exchange Act, targeting digital asset markets and traders who provided liquidity. The rule’s broad language threatened to sweep DeFi participants—those using liquidity pools, decentralized exchanges, and smart contracts—into the same category as traditional market dealers. But Judge O'Connor’s ruling was a stark rebuke. The Court noted: 🧐The rule erased a century-old distinction between “traders” and “dealers,” violating the Exchange Act’s intent. The SEC overstepped its statutory authority, with Judge O’Connor emphasizing, “The Rule as it currently stands de facto removes the distinction between ‘trader’ and ‘dealer’ as they have commonly been defined for nearly 100 years.” The Impact on DeFi and Innovation DeFi protocols operate without traditional intermediaries, enabling peer-to-peer liquidity through open-source software and smart contracts. The SEC’s attempt to regulate such automated systems as “dealers” was seen as a direct assault on innovation. 😴A Reflection on Gensler’s Leadership Gary Gensler’s tenure at the SEC has been marked by aggressive enforcement, particularly targeting crypto markets. While his policies aimed to increase investor protections, many argue they stifled innovation and lacked clarity. 🫥👮The SEC’s repeated losses in courts—Ripple, Grayscale, and now the Dealer Rule—underscore the growing judicial pushback against regulatory overreach. Gensler’s resignation opens the door for a leadership shift, with potential candidates like Dan Gallagher and Paul Atkins signaling a more industry-friendly regulatory approach. 🧭What’s Next? This ruling is not just a legal victory; it’s a pivotal moment for how regulation adapts to innovation. With Gensler’s departure, the SEC faces a choice: continue on a path of contentious enforcement or work towards a balanced framework that supports both investor protections and technological growth. 🤞🗿For the blockchain industry, this is a reminder that vigilance and advocacy are essential. The Court’s decision reinforces the importance of adhering to legislative intent, especially as regulators grapple with the challenges of emerging technologies. 📢As one of the plaintiffs stated: "This is just the first domino. Innovation must prevail over overreach." #CryptoRegulation #DeFi #SEC #GaryGensler #Blockchain #Innovation

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This is the future of legaltech: software that actually ties into business operations and bridges them to legal.

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Counterparty paper doesn’t have to be scary. Use these 6 easy steps to guide you through. Tell me what you would add or change.

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Technology is changing legal services – with learning and innovation on the horizon for legal services and regulation in Washington! The Washington State Bar Association (WSBA) and Practice of Law Board (a volunteer board under the Washington Supreme Court) are proposing a pilot test of entity regulation. For the first time, entities with innovative business models (including those operated by individuals not licensed to practice law) could apply to offer legal services under timebound, limited exemptions from the otherwise applicable rules governing the practice of law. Emerging technology and innovative business models have potential for fundamental impact on delivery of legal services in ways that may be positive, negative, or both. Online companies and innovative business models are already delivering legal services to the public and will undoubtedly expand in prevalence and sophistication in the coming years. Recognizing the profound implications of these changes and to better understand the opportunities and threats presented by these emerging technologies, in terms of safety, quality, and access to legal help for Washingtonians, the proposed pilot is a step to learn more. Over time, the pilot will gather data to understand how new technologies and business models can play a role in the legal services ecosystem to make legal services more accessible, efficient, and responsive to the needs of the public, and how they can coexist with traditional law firm models. This is the beginning of a process, not the end; the goal is to learn more and make transparent, data-driven decisions before any permanent regulatory reform is put in place. Throughout the upcoming process, the WSBA and POLB invite feedback and welcome opportunities to engage about the proposed pilot test. We want to hear from you! Provide feedback to the WSBA and Practice of Law Board via [email protected] – see the information at this link for more details. https://lnkd.in/gfe9zydR https://lnkd.in/gfe9zydR https://lnkd.in/gfe9zydR

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A recent appellate decision has made clear that the regulations promulgated under California’s groundbreaking consumer privacy law, the California Consumer Privacy Act (CCPA, as amended by the California Privacy Rights Act (CPRA)), are ripe for enforcement without any further delay. Moreover, additional regulations expected to be finalized over the next year will be enforceable with no waiting period. Click the link to read the article by Nate Garhart and Michelle Kao.

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A recent appellate decision has made clear that the regulations promulgated under California’s groundbreaking consumer privacy law, the California Consumer Privacy Act (CCPA, as amended by the California Privacy Rights Act (CPRA)), are ripe for enforcement without any further delay. Moreover, additional regulations expected to be finalized over the next year will be enforceable with no waiting period. Click the link to read the article by Nate Garhart and Michelle Kao.

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On September 16, 2024, partner Trent Norris will be leading an insightful session on "Greener and Cleaner: When Good Deeds Can Get You in Trouble" at the California Retail Law Summit 2024. The session will delve into the various challenges retailers face, from navigating longstanding state laws like California’s Proposition 65 to adapting to the innovative Extended Producer Responsibility regimes now adopted in five states. These changes will significantly impact the packaging and presentation of products on retail shelves in the coming years. Details can be found here: https://lnkd.in/eyxTHQX5

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Interesting. New term of art--"AI washing." "The U.S. Securities and Exchange Commission’s crusade against “AI washing” has led to charges against the founder and former CEO of a now-defunct recruiting firm that claimed to use artificial intelligence to match businesses with diverse job candidates. The agency says Ilit Raz pitched Joonko as “the only automated sourcing platform focused solely on underrepresented candidates,” a tactic the agency says helped draw in millions of dollars from customers and financial backers. The eight-year-old firm—which wound down last year and recently filed for bankruptcy—claimed it could help companies meet their diversity, equity and inclusion hiring goals by using AI to automatically match them with a pool of “silver medalist” candidates from underrepresented groups who previously had reached the final stages of the hiring process but not received an offer. The SEC claims Raz defrauded at least 27 investors—a group that includes individuals, private equity firms and venture capital firms—out of $21 million by making false claims about Joonko’s technological capabilities, the size of its customer base and the amount of its revenue. ... “Joonko did not actually use these processes. Raz oversaw the buildout of the Joonko platform and therefore knew, or recklessly disregarded, that the platform did not work as she described it to investors. For example, Joonko did not have the aforementioned capabilities to connect customers with diverse candidates, and its technology was not as advanced as Raz claimed.” In a statement Tuesday, SEC enforcement division director Gurbir Grewal said the SEC believes Raz “engaged in an old school fraud using new school buzzwords like ‘artificial intelligence’ and ‘automation,’” and that investors should be wary of such bold claims. “As more and more people seek out AI-related investment opportunities, we will continue to police the markets against AI washing and the type of misconduct alleged in today’s complaint,” Grewal said. “But at the same time, it is critical for investors to beware of companies exploiting the fanfare around artificial intelligence to raise funds.” According to the SEC, her scheme came to light in June 2023 when Raz’s refusal to provide investors with company documents spurred an investigation by Joonko’s board of directors. She resigned as CEO, and the company wound down its operations. Joonko filed for bankruptcy in May amid demands for repayment from investors. ... Legal observers expect AI washing scams to mushroom as awareness of the technology grows, tempting businesspeople to make unsubstantiated marketing claims." ...

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Whether you subscribe to multiple streaming services or multiple food delivery services (or likely both), if you live in CA, cancelling those subscriptions is getting easier. CA's already strict automatic renewal law just became even stricter and those offering subscription products will need to update their terms and practices. #subscriptions #autorenewallaws https://lnkd.in/etKzH8e3

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The SEC’s case against Tomahawk Exploration LLC (as of 2018) clarified that airdrops, even if free, can be classified as securities due to the expectation of profit. The SEC used the Howey Test to determine that recipients anticipated gains from secondary trading, thus violating securities laws. This case has impacted developers, forcing them to exclude U.S. participants from airdrops. While recent letters to SEC Chair Gensler raise questions about distinguishing airdrops from loyalty points, the Tomahawk ruling may have already provided sufficient clarity. https://lnkd.in/dj3pp_3J https://lnkd.in/dWX-Bikx #Blockchain #CryptoRegulation #Airdrops #SEC #Fintech #Innovation #DigitalAssets #Tomahawk

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AI Counsel Code host Maggie Welsh is joined by partner Michael Ward to discuss the considerations that companies should be thinking about when crafting artificial intelligence policies and #AI governance models. They cover bans, risk assessment, compliance and more. 🔊 Listen here: https://okt.to/kX9SDl #ArtificialIntellegence #Podcast #AICounselCode

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Why would Intel's top IP lawyer be considered appropriate choice for Director of the USPTO? "Intel Corporation is under scrutiny following a shareholder derivative lawsuit seeking the recovery of compensation from ex-CEO Pat Gelsinger, CFO David Zinsner, and other leaders. Filed in the Northern District of California, the suit alleges breaches of fiduciary duties and misleading financial disclosures related to Intel’s foundry business. Key claims include: ▪️ Misrepresentation of the foundry unit's performance, later revealed to have lost $7 billion in 2023. ▪️ Misleading statements about the foundry as a “significant tailwind,” followed by a 9.2% stock drop after revised financials. ▪️ Substantial reputational and financial damages for Intel due to these actions." Robert Quinn, Intel Corporation, USPTO, #patent,

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