YouSaid · the spoken record

Eva Shang

lines on the record: 76
first: 2024-06-27
most recent: 2024-06-27
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Yeah. So Land Samantha Chang has this quote where she says, if I could change anything about my life, I would not have been so unhappy when I was young”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Very interesting. I don't think that there's anything that I could have told myself that I would have had the context to understand.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Back then, I really didn't know anything. So being young is like having a flashlight that only shines one step ahead of you and no further.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So, my own trajectory has been a little bit unusual, and I think that most people assume that finances and apprenticeship business where you can only learn by studying with someone who has already done it. But I think that coming from that perspective means that you're always going to do it the way that people did it before. And we've always had this advantage from being able to examine everything from first principles. I guess my advice would be that People should not be afraid to deviate from that traditional lockstep path.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“He has one that he just published called Table for Two. And then my favorite of his is a short story called You Have Arrived at your destination. And the short story is about this idea that if you were to be able to project the lives of your children, it would be in three acts like a play. So, in the first act, you have youthful optimism where you have all these hopes and dreams and the world is opening itself up to you. But then you have the second act where you experience a setback. And he calls this second act setback coming to terms with your own limitations. And at this point, a lot of people just retreat or they give up. But then if you're able to kind of accept who you are, you can move into the third phase, which is a place where you can be a better person and live a deeper and richer life.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Hotel in revolutionary Russia, but he manages to create a life there, which shows that you can change your environment no matter what your environment is”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, okay. So there are two people who have worked in finance, who have written actual literary works. One is Gary Cernowitz, who wrote The Counting House, and I've got a copy for you today. And then the second is this guy named Amore Towels, who worked at an investment bank for 20 years and then switched completely to writing fiction. And so what I like about his stuff is that most literary authors have only ever been authors. And when you're an author, you are coming from a place of passivity where you're not actually an actor in the world. You have no ability to change the world. You're just observing it. But because Amore Towels has been in business for so long, he writes characters that are extremely proactive and optimistic and have such a good attitude that they're able to shape the world around them. Oh, of course. Yeah. The main character is literally trapped in a”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm going to have to say our old general counsel Curtis, who shaped everything that Christian and I know about litigation and also made us lawyers.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I'm a big fan of Morgan Housel's podcast, where he talks about the psychology of money. It's very rare to find someone who's deeply philosophical, but also interested in finance, and his podcast is the perfect intersection of that.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So, the interesting thing about my life has been that I kind of grew up with the company. So, when I started the company, I was 20, and I was basically just out of my parents' house. And these days, I have my own house, and I have a one-year-old baby. And last fall, I made Thanksgiving dinner for the first time And a lot of what I think about when I think about leaving Harvard is that it's really like gazing back at your own youth. And so you feel a lot of nostalgia for the person that you used to be and how different you are from them. And along the way, I poured those years into the company and grew it to where it is today. So I think that's really what that essay is reflecting.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“The insane. My other pet theory about finance is that there are many ways to make money, but most of them have markets associated And so anytime there's a market, the purpose of a market is to compete out all the alpha. And so what people are saying is usually I'm smarter than everyone else in the market. And that goes against the fundamental efficient market hypothesis. Right. And so, where you should try to be instead is the area where there hasn't been a market formed yet. You should try to be at the place where there isn't a sale and then try to force them into a sale rather than going to the auction house and assuming that you're buying the art for the right price.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think that people overcomplicate finance. I've learned that if I can't understand someone after having it explained to me once or twice, then it probably doesn't make sense and they're just pretending to understand it. I mean, the underlying fact of credit or finance or any kind of investing is I give you a certain amount of money And you give it back to me if XYZ, and you have to understand under what circumstances you get it back and how you get it back. And you have to understand under what circumstances you disperse and how you disperse. And then you try to minimize the gap in time and maximize the difference between what you put out and what you get back. It's really not that complicated, but I think that modern finance has had so many smart people try and overcomplicate it that they've obscured that very simple fact.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So that was the problem that Christian ran into at Harvard back in the day. And it was because we were newbies at it. And when you actually do it for a long time, you learn to moderate your traffic and only go to the pages that you need to go to”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So everything that the government does has to be publicly accessible, but it doesn't mean that it has to be easy to access, which is a completely different standard. And so many of these state court websites are extremely difficult to access. Are updated every day with new filings, but it doesn't mean that you can just go in and download a CSV. I mean, if we could, that would make our lives so much easier.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly how many counts were denied and how many counts were accepted. And that will influence whether we reach out and when we reach out and what we say when we do reach out.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So, there are two ways in which we can improve the technology. One is adding more data sources. For instance, adding our government receivable strategy. It was so many new government websites that had to be scraped. And then the second way is improving our existing process. And I don't know if you've heard about the advent of generative AI, but it has been kind of a game changer for us. For a lot of legal tech companies, because now we're not just able to analyze the docket, but we're actually able to analyze the rulings themselves and figure out what we like about them before we reach out to. So you're looking at rulings.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. The reason that litigation happens is because of a gap in expectations between the plaintiff and the defendant. So the closer the gap is, the more likely it is to settle quickly. And then the wider the gap is whether one side is unreasonable or the other, the more likely it is to drag on and actually go to trial. And we see this even with going back to the earnout example, even with a pretty clear cut earnout example, because it might have stages to it. And even if everyone agrees that it's somewhere between 5 and 10 million, they'll still litigate over whether it's 5 or whether it's meant to be 10.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, right. I think that litigation is frequently misunderstood in that way. Most people do not want to be in litigation. It's not a fun place to be, which is where you see, which is why you see so few lawyers act as plaintiffs themselves in litigation, because it's just not very fun. It kind of eats you from the inside emotionally. It's draining.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“It's not common for us to fund franchisee, franchisor cases. It's not really detailed because the franchise agreements are written in a pretty airtight way.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“These are contract disputes between franchisees, franchisors, distributors, things like that. But no matter what type of company it is, whether it's a trucking company, a software company, an entertainment company, are only so many types of disputes. It's like you don't honor your contract. You steal someone's money. You steal their employees. You steal their trade secrets. Take the business opportunity that you were meant to do together and then do it yourself. And it makes you realize that humans act extremely consistently. No matter what industry they're in.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“No matter what industry it is, we've had several cases with indoor trampoline companies, right? I was really shocked when the second indoor trampoline company dispute came my way. I was like, how many indoor trampoline companies are there? Anyways.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“That's part of the reason why I'm in finance. It does make me a lot more aware of all the things that could go wrong when you do business with people. It's like.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“And it's not that we are not bullish on relationships, it's that I think that when you have a solely relationship driven origination approach, you're really limiting the number of deals that you can do.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So even though we fund the plaintiffs, the attorneys are usually our primary points of contact because attorneys are repeat players. And so at this point, our team has 5,000 calls with attorneys every single year. And at this point, we've spoken to tens of thousands of attorneys, pretty much everyone that does the type of case that we'd like to do. When we first started out, it was all cold outreach, but these days it's a lot more, hey, I saw that your ex-case just survived motion for summary judgment. Congratulations. Do you want to reconnect in a couple weeks, even though I know we just talked, you know, six months ago? So it's a lot more of these warm connections.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, but what we found is that people put out energy into the world and then it is reflected back to them. And so when we've had situations where we've just We're just like, did you really hate that guy? I really hated that guy, and he's got such a technically good case on paper. And we've had a handful of losses that have had the spack pattern, but once they get to trial, the judge is like, oh, I can see why you terminated that contract. I can see why you didn't want to work with him. And then they inevitably lose. And the jury will”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. And what then our underwriters do, and there is still a big human lawyer underwriting component for the simple reason that, you know, if you look at a case, there are three elements to underwriting it. There's will it win? How much will it win? And if they do win, can the defendant even pay it? And the latter two are really what we still need a lawyer to check for. So a lot of what the lawyers check for is... Does it actually make sense for this guy to get this amount of money? And we call this the no policy.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So, for that reason, we don't do any patent cases because there is really no stage at which we could fund it where it has been de-risked. And we're really looking for preliminary motion hurdles that de-risk a case.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So, the qualifier for the truffle sniffer is based on a set of variables that include static variables. So these are things that would eliminate a case categorically or qualify a case categorically. And then there are also time series variables. So the time series variables are related to things that happen in the case. And this is not at all obvious to detect, and this is what our machine learning is trained on. But we're looking for signs that a case is going really well. For certain types of cases, getting a preliminary injunction might be a really big deal. For other types of cases, like patent cases, for instance, 50% of patent judgments are overturned on appeal even if they win.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that's right. I think we happen to be at a very good moment in time where a lot of our investors are people who are already familiar with litigation finance, but happen to not like how it was being done before. So, the big problem with litigation finance traditionally as an industry is that each litigation itself carries a ton of idiosyncratic risk. You could have the best case in the world and get in front of a judge, and the judge is feeling kind of crotchety that day. And so then he dismisses it, and then you're done. And what our strategy does is our strategy takes the idiosyncratic risk out of each individual investment out by pooling it with hundreds of other investments. And there were no other litigation funders. There are no other litigation funders that do it the way that we do.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So that is the niche that we occupy for our LPs. They have a lot of things that are market correlated. And depending on their liquidity and return profile that they're looking for, they might invest in litigation finance, which is longer duration. It's a kind of a five to seven year drawdown fund. Or if they're really looking for liquidity but are willing to do a lower return profile, they might look for something like government receivables, which has quarterly redemptions, but is more of a 10 to 12% net. And then dip is somewhere in the middle. Across all of our strategies, I think the non-correlated component is a super important part of both how we market and the value that we provide.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So each one of our strategies individually is capacity constrained. And you can see this by the fact that the industries that they are in are not that large. So the largest government receivables funder has $2 billion of assets under management. The largest litigation funder has a couple billion of assets under management. They are kind of what they are, but we see our firm as a tech-driven alternative credit firm. And the types of alternative credit there are out there is huge. Right. That's a trillion”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so we don't need to go to people we know and say, hey, is there any chance you want financing? We can actually go into the government contract websites and say, okay, who here looks like they would need government receivables financing?”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So we did not invent any of the asset classes that we are in. However, we approach what we do in a very unusual way, and a lot of our LLPs see that. So the reason that we even came up with a government receivable strategy, which is, you know, a liquid hedge fund, it's got a much shorter duration than we're used to. It's a different type of database, is because one of our LPs, a university endowment, approached us and said, hey, look, I've got this other manager. They do government receivables financing. I freaking love this asset class and I want more of it But they're not able to source more because they're using their relationships to source.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So, most large bankruptcies are called prepackaged bankruptcies. So there's already a dip lender in place. What we specialize in is looking for these subscale dip opportunities where There is no pre petition lender that's willing to put up the dip financing, and so you can come in and be a priming lien on all the assets of the bankruptcy.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“A huge amount of receivables, and I would love to fund Boeing, but Boeing would never want funding from us, so it is what it is.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“And the reason why we're able to find these businesses is because, and you'll notice everything we do is related to either the legal system, the judicial system, or the government in some way. Because what our technology does best, and we call our technology the truffle sniffer, as in like a pig that goes into the forest and then finds valuable truffles, is we crawl through these comprehensive government databases and pull out the information that is relevant for investment purposes and go after those deals specifically. So in litigation, we're looking for cases that win, in government receivables, we're looking for businesses that are owed receivables and are likely to be in financial need of receivable financing.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“If not more. Right. So the individual receivables can be as low as 10, 20,000. But we usually set them up as credit facilities with people who generate lots of these receivables. And the facilities might be a couple million”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So litigation finance is by far our largest strategy, but we also have a couple hundred million in a type of distress lending in bankruptcy called DIP lending. And we also have a couple hundred million in a type of alternative credit called government receivables. So government receivables is where you have a 90 to 120 day receivable from a federal or state government entity, either because of a grant or a contract that you performed on or a credit of some sort, and we advance against that and then get paid directly by the government.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right. So we usually charge a significant multiple on our dollars put out. And across the fund, we target a 20 to 25% net. So we're trying to be comparable to private equity, but in half the duration and uncorrelated, of course.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly, exactly. Now, the secret about the defense side is that it's often in their best interest to draw out the litigation process. One, because the plaintiff might run out of money, and two, just because if I'm owed $10 million in an earnout, it benefits the defendant to pay that to me in five years rather than today, even if they settle for the full amount. So that's why a lot of defendants, especially big companies, will weaponize the fact that they have deep pockets, can pay for lawyers, can drag things out, and what's the plaintiff going to do? Sue them in court and take five years to do so. And so that's why you might see cases where both sides recognize that the plaintiff is at least entitled to something, but where the defendant just hasn't settled because it's in their economic best interest to drag it out.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“The majority of them are settled. And litigation finance, I have to admit, does introduce a hurdle beyond which the plaintiff has to hit in order to settle for a reasonable amount and make a reasonable amount of money. So that's the reason why in litigation finance, you don't see settlement rates that are as high as you would normally see. The plus side of this is that normally a lot of plaintiffs run out of money and then they settle the case for pennies on the dollar. And so litigation finance allows them to hold out for what they're owed.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. That's called a nuisance value settlement. And so theoretically, the less money you can invest in each claim, the higher the likelihood of success. And if you were to invest $1, you would win every single litigation.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes. It's a concealed envelope. Right. And everyone has their best estimate of how much is in that check. But theoretically, if you were to buy the envelope for $10 or even $10,000, you would always make money. A defendant is always willing to settle for at least $10,000 just to avoid paying their lawyers.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“That was the big thing that we learned in the early years. So, in the early years, we only had 10 million of assets, but we had billions of dollars of deal flow. And so what we would do is we would work with other litigation funders, multi-strat hedge funds that did litigation funding, and we would refer cases to them and watch how they did their work. And what we noticed was that litigation is essentially like an envelope with a check in it. You do not know how much is written on that check.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right. So we went about 75% of the deals that we do win being calculated as it makes above the amount that we put in and loss being anything below principal.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“The pace of the number of deals we do is definitely accelerating considering the fact that we only had 10 million for the first two years. But we've learned a lot along the way.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and I always wondered why huge bureaucracies can sometimes lose to startups. And it's because there's so much internal energy that's spent fighting each other and the lack of cohesion means that you can't all row the boat in the same direction. So there's actually energy working against each other. And that's one of the reasons why many of our employees have been with the firm for five plus years and why that kind of trust and loyalty and culture is, I think, the root of what enables everything we do today.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“When they're actually battling the aliens for the final battle on behalf of all of humanity, I'm outing myself as a huge nerd here. But they bring in Ender's closest friends.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Or since Scott Card. Yeah. But in Ender's game, you'll notice that at the very end, they don't bring in the top kids from every class. They bring in a lot of”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“I also think that the cohesion of an organization is so much more important than how talented the individual parts are. So there's this children's book called Ender's Game, which I've always loved. We read it.”
2024-06-27 · Masters in Business · Eva Shang on Litigation Finance Funds · IDENTIFIED FROM THE TRANSCRIPT · source