Legal Challenges in Venture Capital: Rebecca Lester on Miami Cross-Border Deals and Tips for Startups

As Miami continues to emerge as a global hub for innovation and entrepreneurship, the city’s venture capital ecosystem is evolving at a rapid pace. Rebecca Lester, a venture capital attorney at Nelson Mullins, stands at the forefront of this transformation, guiding startups and venture capital funds through complex legal transactions, particularly in cross-border deals involving Latin American entities. With her experience and commitment to supporting Miami’s tech community, Lester offers a unique perspective on the opportunities and legal challenges in venture capital, shaping the region’s future. We sat down with Lester to discuss her role, the evolution of Miami’s venture capital scene, and her advice for entrepreneurs aiming to secure funding in this dynamic market.

Could you tell us about your role as a venture capital attorney at Nelson Mullins and how it intersects with the Miami tech community?

Lester: “Sure, as a venture capital and startup attorney my role is often to help clients take their ideas and goals and help them make them reality. I see myself as a guide, whether for a VC fund that is investing in a startup that they think is worth betting on or a founder building and growing their company. My role is to help my clients on their paths, hopefully to success. Nelson Mullins is a great platform for that, because we are a full-service firm of over a thousand attorneys. So, if there is something a client needs, I can call a specialist in my firm. If no one at my firm can help directly, we know someone who can, especially in Miami. Nelson Mullins is relatively new to Miami, but they acquired a Florida and Miami-based law firm, Broad & Cassel. What that means is that we have been in this market for decades, we know the decision makers and we are dedicated to the community here because it is home. For me that means working with government groups supporting Miami tech, with community spaces for Miami tech, and other corporate partners like CIC, SVB, and VC funds expanding here. And with my firm’s history here, they have always helped support my and my team’s community engagement.”

How has Miami’s venture capital ecosystem evolved since you began practicing, and what unique advantages does it offer compared to other U.S. hubs?

“Interestingly, since I am newer to practice the Miami venture capital ecosystem has grown rapidly, but the evolution really happened before I stepped into the ecosystem as an attorney. That said, before I became an attorney I worked at an accelerator in Miami Beach in 2015, one of the first in Miami and I worked as a legal intern in this field 2018-2021. I would say I have seen two major evolutions of the ecosystem here that have each spurred growth. First, in 2015, Rokk3r Labs, now Rokk3r and one of its portfolio companies, Admobilize were breaking ground and helping establish a true ecosystem in Miami. Companies like them invested into an ecosystem that was small business focused and started pushing it towards venture capital and startups. Around that time Uber was also exploding and fighting to be in Miami. eMerge Americas has also been a major pusher towards evolution. Then came COVID. Miami was already a LatAm Hub and starting to try competing with Silicon Valley, but when COVID shifted how we worked and people moved out to states like Florida from cities like NYC, that was a major trigger for evolution. Miami’s existence as a multicultural and international business hub, located so closely to South America that a day trip is possible from certain cities, really makes it a city that strives to and successfully adapts to technological advanced that make it a perfect hub for VCs from around the world and country to find new investment opportunities.”

Given your experience with cross-border deals and transactions, particularly with Latin American entities, how does this benefit the local Miami VC community?

“When you come to Miami from Latin America, it’s not the same as going to New York or D.C. We are close to Latin America in a different way than anywhere else. Here I have work calls in at least two to three languages every week. I’ve learned how to have technical conversations in Portuguese and Spanish because the startups, the funds, the people in the ecosystem are coming from all over and we want to be able to ensure we are all talking the same language, often literally.”

What unique legal challenges do venture capital transactions in Miami face, and how do you help your clients navigate them?

“One of the issues we often see is the flashing of regulations versus market standards. For instance, Brazilian VCs often invest in the US and will come through Miami, but the regulations that Brazilian funds have to comply with require portfolio companies to agree to certain terms that are non-market or even very heavy asks for early-stage companies. A big part of my job is bridging that gap.”

How are recent trends in efficiency and strategic funding impacting the venture capital landscape in Miami, and what strategies do you recommend for startups navigating this environment?

“At the Florida Venture Forum Conference in February, there was a panel that I think best discussed this. Investors want to invest in startups that have founders that have invested in them before looking for external funding. I don’t think this is limited to Miami, but it is a trend we are seeing. VCs are looking to invest in particular types of companies and companies that have founders that have more than just an idea or a dream. I recommend that startups leverage public resources to find advisors and non-VC funding. I also think some startups may also want to really consider if they are a startup or a small business. We help both, but how a founder thinks about funding and mapping their company’s path can hinge on this perception. Sometimes, there are resources available to small businesses that startups can’t access.”

What key legal considerations should Miami-based entrepreneurs prioritize when preparing for their first significant funding round?

Lester: “Clean up. The nature of a startup is often that the company is spun up and operated with little to no cash going into legal. Startup attorneys like me get that, but when you’re ready to get funding, it is time to clean up. Take some time and have an attorney diligence your company’s and help set up your data room. In particular, anything touching IP and company ownership (stock, SAFES, etc.) needs to be buttoned up. Before you sign a term sheet, make sure you know what you’re giving up and model your cap table.”