A Conversation with David Willard: In the Changing Business World, Integrity Still Matters
Below is an interview with David Willard. A member of Princeton’s Class of 2006 Willard graduated magna cum laude and Phi Beta Kappa. Nonetheless, Willard’s success at Princeton did not stop in the classroom. As a walk-on mid-fielder for Varsity Lacrosse, he was a part of the team that won three Ivy League Lacrosse Championships, and he competed in both the 2002 National Title and 2004 Final Four games.
After Princeton, Willard obtained his J.D. from NYU, graduating cum laude. In his early professional career, he worked as a Financial Analyst in the Investment Banking Division of Goldman Sachs in London and as a Hedge Fund Analyst and Investment Committee Member for Pantera Capital. Later, he would work as a Corporate Associate for Cravath, Swaine & Moore LLP advising multi-national companies in mergers and acquisitions. More recently, Willard served as Vice President of Sage Capital in his hometown of St. Louis where he led the company in managing investments.
In his latest chapter, Willard now serves as the Founder, CEO, & Managing Partner of 52 Capital Partners. The firm is “an independent advisory firm that provides strategic advisory services to senior management teams, founders and boards of directors of corporations, financial institutions, family-owned enterprises, and entrepreneurial ventures”. With extensive knowledge of transactions and acquisitions. specifically in China, the firm is a growing force in international M&A transactions.
BT (Emily Cheston): During your career, you’ve participated in and led M&A transactions in both the realm of international finance—at 52 Capital Partners and Goldman Sachs—and in a law firm setting—at Cravath, Swaine & Moore LLP—in all, closing 52 deals totaling over $150 billion in aggregate deal value. What advice would you give to today’s young professionals who may feel compelled to “choose” one path versus the other?
David Willard: In today’s interconnected and digital world, the career paths of finance and business law have become intertwined. I encourage many young professionals to think of it as less of a “choice” between two paths. In finance and business law, versatility of career perspectives is increasingly valued more highly than what I call “hyper-specialization”. This may seem counter-intuitive: “Shouldn’t I specialize in a super-specific niche on Wall Street, and never look back?” You certainly can, but, as the last 20 years have demonstrated, the proliferation of new technologies and innovations across professional services can cause once-valued niche skillsets to become less relevant—and sometimes virtually obsolescent—in the marketplace.
Our innovation-based economy increasingly rewards professionals who are (a) versatile in skillset and experiences, (b) adaptable to career change and (c) highly effective at, and comfortable with, collaborating with individuals, institutions, and stakeholders across the spectrum of industry. Some of today’s most successful finance professionals never opened an economics book in college, or they pursued civic initiatives like Teach for America or served in the U.S. military prior to business school. Likewise, some of today’s busiest deal lawyers started a small business prior to law school or concentrated in fields as varied as Physics, Music, Neuroscience, Asian Studies or Engineering.
Also, a growing number of career deal lawyers are transitioning to pure finance roles in investment banking, private equity or industry, and greater numbers of finance professionals are deciding to pursue a law degree after spending years on, say, a Wall Street trading desk. A career in finance and business law today is far less rigid than what prior generations experienced. I encourage today’s young professionals to approach careers in finance and business law as less of a linear walk across a tightrope. Instead, envision your career as a mosaic. Work hard. Work with integrity and professionalism—always. Cultivate your friendships. Be adaptable to change. Accumulate experiences and skillsets. Grow your career mosaic.
BT: Your strategic advisory firm, 52 Capital Partners, is unique in that, in addition to your firm’s core mission of advising clients on M&A deals and intellectual property transactions in North America and China, you’ve also established three innovative “impact” divisions at the firm—The 52 Institute ™, The 52 Forum ™ and 52 Gives ™. The “impact” divisions of 52 Capital Partners are committed to delivering thought leadership, dialogue, and service to at-risk communities, respectively. What compelled you to create your firm’s “impact” divisions at the founding of 52 Capital Partners, and how do you see those divisions progressing in the future?
DW: I founded 52 Capital Partners with the core mission of advising North American management teams, Founders and Boards of Directors of corporations, financial institutions, family-owned enterprises, and entrepreneurial ventures. We advise our clients on mergers and acquisitions and other transformational, complex or high-stakes transactions in North America and China.
We invest in cultivating long-term relationships with our clients based on trust, integrity, and partnership. We are quintessentially boutique; we are not, and do not strive to be, the largest strategic advisory firm measured by gross revenue, number of offices or headcount. We hire and cultivate entrepreneurial professionals to build long-term careers with us.
At the outset of founding 52 Capital Partners, I was faced with an important decision. Should I ignore the implementation of important “impact” initiatives and instead focus exclusively on ramping up our firm’s pipeline of M&A transactions, yielding greater revenues in the short-term? Or should I promptly launch each “impact” initiative which, while not yielding a short-term profit to my firm, would be valued highly by our current and prospective clients over the long-run?
I chose the latter route; I launched all three “impact” initiatives within days of founding the firm. Thought leadership, constructive dialogue, and service to at-risk communities are not platitudes at 52 Capital Partners. They are central to what I’m building. And they are in keeping with the values of our North American clients and the types of clients we want to serve.
In serving our clients, we are committed to fully leveraging our firm’s intellectual capital and thought leadership. In keeping with that objective, I created The 52 Institute ™ —a web-based ecosystem highlighting our firm’s independent, proprietary insights. The purpose of The 52 Institute ™ is to deliver timely perspectives to our clients and the public on topics pertinent to important strategic challenges and issues faced by corporations, financial institutions, founder-led enterprises, and entrepreneurial ventures.
Fostering constructive dialogue is embedded in the DNA of my firm. We are committed to providing excellence in client service at all times. We’re committing resources to host an annual one-day conference—The 52 Forum ™ —for our clients and our Advisory Board members. The 52 Forum ™ will convene in three cities, alternating successively among them from year to year: 52 Pacifica ™ (San Francisco); 52 Atlantica ™ (New York City); and 52 Heartland ™ (St. Louis) and will consist of a keynote speaker and three panels covering topics pertinent to our clients, ranging from business, innovation, and entrepreneurship to sustainability, the environment, and China. The purpose of The 52 Forum™ is to provide a relaxed environment within which our clients and our Advisory Board members can learn, share perspectives and engage in constructive dialogue with other leading executives and entrepreneurs from across the United States.
The third “impact” division of 52 Capital Partners is our 52 Gives ™ initiative. With many Americans experiencing difficult circumstances or residing within communities in need, we recognize our responsibility to lead by example in supporting at-risk individuals and underserved communities across the country. Through our 52 Gives ™ initiative, we are committed to donating a portion of our revenues each year to worthy charitable causes across the United States. As the Founder of 52 Capital Partners and creator of 52 Gives ™, I take this responsibility seriously; I memorialized our non-discretionary charitable commitment of 52 Gives ™ in our founding charter.
We are committed to serving our clients; we’re creating new jobs; we’re creating opportunities for North American businesses; and we will continue to grow and serve our clients on their most important transactions. Our “impact” divisions will continue to grow, too. They are an integral part of 52 Capital Partners.
BT: Your experience in successfully advising Michael Jordan and Nike in China’s Supreme People’s Court focused on intellectual property rights. The case ultimately was an historic victory for Michael Jordan and Nike and also established a seminal judicial precedent for major American multi-national companies seeking trademark protection in China. How would you characterize the current state of China’s intellectual property system?
DW: China’s intellectual property system remains a work in progress. Intellectual property risk is ever-present for M&A participants in China and remains a serious concern for North American management teams, boards, innovators, and entrepreneurs. Of course, some progress has been made as China has begun to implement more credible laws and regulations aimed at addressing intellectual property theft, including copyright piracy, trademark infringement, and patent squatting. China has also developed an intellectual property court system; it’s specifically charged with adjudicating intellectual property disputes across the country. These are constructive, albeit incremental, developments.
But real challenges remain; this cannot be overstated. The probability of those challenges diminishing materially in the near-term is low, and the overall pace of intellectual property reforms in China is lagging despite the continued expansion of the Chinese economy and China’s growing interconnectedness with the American economy. This isn’t a novel conclusion; the data supports it.
Accelerating reforms across China’s intellectual property system will be important for the sustainability of major multi-national enterprises that do business in China. My firm works with North American management teams and boards to mitigate their companies’ intellectual property risk in China when they deploy new capital, products or services into the country. Yes, China is a huge consumer market, and yes, it presents growth-oriented opportunities for multi-national companies. However, diving into the China market without carefully sizing up the intellectual property risk can precipitate high-dollar pitfalls down the line.
BT: As an advisor to multi-national companies, financial institutions, and entrepreneurial ventures, how have you seen mergers and acquisitions affected by the recent shift in trade policies in the United States and China?
DW: Trade tariffs and recent international political dynamics have reduced the number of cross-border mergers and acquisitions. There’s no question; the data bears that out. Although the first half of 2018 represented the most robust six months in M&A activity in 17 years, cross-border deals took a hit. There were roughly 2,800 cross-border deals in the first half of 2018, compared to 3,300 in the same period in 2017. Heightened trade tensions may continue to hamper cross-border M&A activity. This isn’t to say that good cross-border deals can’t get done. In the current market environment, success with cross-border negotiations just requires more patience and innovation.
The appetite to do deals in China remains strong. In fact, many North American private equity firms remain active in China. My firm works with North American management teams and boards to strategize on new M&A and investment opportunities in both North America and China. Private market valuations in China, particularly in non-technology verticals, remain comparatively attractive. At the same time, we’re seeing increased concerns among Chinese counterparties about greater U.S. regulatory scrutiny of inbound Chinese deals. Compared to two years ago, there are fewer Chinese buyers in the U.S. market today. Part of this is attributable to bilateral tariffs and other protective regulatory measures in the United States and China. It’s had an effect—no question.
BT: What sparked your interest in Mandarin, East Asian economies and U.S.-China Relations?
DW: Somewhat amazingly, it all started with a letter. In the summer of 1997, I received a handwritten note from Dr. Ching-ling Tai, the legendary Mandarin instructor of St. Louis University High School. As she did with every other student, she graciously welcomed me to the school. She encouraged me to enroll in her Mandarin class. An inspiring educator, Dr. Tai was a naturalized American citizen. She had trained generations of Americans to become proficient in Mandarin. I hadn’t studied Mandarin previously, nor had I been to China. The opportunity was fascinating. Further, Great Britain’s handover of Hong Kong to China had occurred that summer, a momentous, televised event. It became evident that China was growing, so Mandarin seemed like a good investment. For four years, I studied Mandarin under Dr. Tai—five days a week.
At Princeton, the faculty placed me into advanced Mandarin courses usually reserved for upperclassmen and doctoral candidates. I completed the Princeton-in-Beijing Chinese Language Program at Beijing Normal University. Later, I served as a Princeton-in-Asia Fellow in China, teaching English and American history to at-risk students in elementary schools and high schools. I chose East Asian Studies as my major, and following my junior year, I was accepted to study for a full year at Tsinghua University, the top-ranked engineering university in China. During that year in Beijing, I was invited to work on trade and policy initiatives at the Delegation of the European Union to China. While in Beijing, I also conducted on-the-ground research for my Princeton Senior Thesis, which analyzed property rights in China.
At Princeton, I had wonderful professors. I was fortunate to study under Harold James, Willard Peterson, former U.S. Ambassador Jack Matlock, Joanne Chiang, Aaron Friedberg and G. John Ikenberry, among other wonderful members of the Princeton faculty. At the Council on Foreign Relations in New York City, I was very fortunate to work with Dr. Elizabeth Economy, the Director of Asia Studies and one of the world’s leading experts on China’s domestic and foreign policy. Years later, during graduate school at New York University School of Law, I was incredibly lucky to work with Jerry Cohen—the world’s foremost expert on China’s legal system and the head of the US-Asia Law Institute. All of these experiences, combined, solidified my interest in Mandarin, East Asian economies and U.S.-China relations. Together, they were the “spark.”
Beyond Princeton and NYU Law, working at Cravath, Goldman Sachs, and the White House strengthened my commitment to working with North American businesses on international M&A transactions and other strategic initiatives in North America and China. Today, advising North American clients on transactions that involve China is an integral mission of my firm, 52 Capital Partners. All along the way, I’ve been blessed with a very supportive wife, along with many clients, friends, and colleagues who have shared in the journey.
Perhaps informed by my experience two decades ago, to this day I enjoy penning handwritten notes. Take a break from the screen. Write a blue-ink note. An old-fashioned letter can yield exciting new adventures and friendships.
BT: You speak Mandarin fluently. You’ve used Mandarin throughout your career, including at Goldman Sachs, Cravath and Pantera Capital. Today, your firm, 52 Capital Partners, advises North American institutional clients in connection with mergers and acquisitions and other strategic transactions in China, which requires your use of Mandarin on virtually a daily basis. How important has a proficiency in Mandarin been to your career? Would you advise young professionals to consider learning Mandarin?
DW: Proficiency in Mandarin has yielded many opportunities. In many instances in the deal-making world and still to this day, it’s an indispensable part of my work in advising clients on large M&A transactions in North America and China. It has removed obstacles in negotiations with Chinese counterparties in M&A deals. It has fostered long-standing friendships and professional relationships with colleagues and clients who share a strong interest in U.S.-China relations and issues of economic sustainability. I’m fortunate to have opportunities to share perspectives on U.S.-China M&A and investment topics with my firm’s clients, American universities and the broader public.
It can also yield unexpected opportunities to make an impact in concrete ways. For example, the U.S. Chamber of Commerce and the former Director of the United States Patent & Trademark Office asked me to assist in advising Michael Jordan and Nike in a landmark case involving infringement of Jordan’s trademarks in China. It was an important matter with a lot at stake, not only for Michael Jordan but also for hundreds of American multi-national companies who anxiously awaited the final decision from China’s Supreme People’s Court. I was called upon because the initiative required reviewing, translating and analyzing hundreds of Mandarin-language documents that were relevant to the case. It also required crafting a credible strategy and an advisory brief—or an amicus curiae brief, in the parlance of U.S. courts—for Michael Jordan and his legal team. It happened to be the first-ever amicus brief to be successfully filed in, and accepted by, a Chinese court in the history of China’s modern judicial system. Thankfully, China’s highest court reached the right decision. And Jordan prevailed.
Finally, data underscores the growing relevance of Mandarin in the business world. Mandarin has the most native speakers of any language, including English. Nearly 20% of all Internet users in the world are Chinese. Over 800 million people in China use the Internet today; by comparison, the U.S. has an estimated 300 million users. And yet, the number of American executives today who possess any sort of proficiency in Mandarin is a small fraction of our total population compared to the number of Chinese executives with English proficiency. While the numbers in the U.S. are improving (if only modestly), a dearth of non-native Mandarin speakers remains. There is no quick fix. Outsourcing Mandarin translation work to third-party contractors or service providers can assist in deal-making on a case-by-case basis. But it isn’t a long-term cure-all for a far more fundamental imperative.
Bluntly stated—we need more Americans studying Mandarin and becoming proficient in Mandarin. We need American universities, policy institutions and businesses to become committed stakeholders in this effort. The sustainability of the 21st century will hinge on the ability of leaders in the United States and China to forge constructive relationships that withstand the test of time. And language proficiency on both sides will be critical. We need more Americans carrying Mandarin proficiency into industry, finance, education, medicine, and public service. This is not only sound policy; it’s smart business.
BT: Is there a distinct memory from Princeton that you will always remember?
DW: Like many Princeton alums across the generations, I’m blessed with many wonderful, cherished memories from those amazing years on campus. Gosh, where does one even start? Among some of my most memorable experiences were: overcoming the odds with my Princeton teammates to compete in two NCAA Division I Lacrosse Final Four Championships, including the National Title game; joining hands with classmates on Cannon Green and in the candle-lit University Chapel to honor the victims of the September 11th attacks, which occurred just two days prior to the start of freshman year; presenting my Senior Thesis in Mandarin to the faculty of the East Asian Studies Department in Jones Hall; volunteering as the pianist for Triangle Club performances; serving urban communities in New Jersey with classmates and teammates; walking through the FitzRandolph Gate at graduation with friends and classmates; Reunions…and more Reunions. Princeton is a place like no other. But no memory from Princeton is more distinct and cherished than the moment I met my wife on campus during my sophomore year. That moment surpasses all others!
BT: You were an Academic All-Ivy midfielder—and walk-on—on the Princeton Varsity Lacrosse Team. I’m sure that successfully balancing your academics at Princeton with an extraordinarily demanding athletic schedule was no easy feat. How did your experience as a student-athlete on the Princeton Varsity Lacrosse Team later shape the development of your career?
DW: The student-athlete experience at Princeton is unique—and rigorous. Princeton’s curriculum is one of the most challenging in the world, and rightly so. It’s an extraordinary opportunity to be able to learn from, and collaborate with, some of the world’s most talented minds. At the same time, Princeton’s varsity teams compete at the highest level of collegiate athletics. Many Princeton squads perennially win Ivy League Championships and are nationally-competitive. The Princeton Men’s Varsity Lacrosse Team won six Division I national championships from 1994 to 2001; I was fortunate to be a member of a Princeton team that won three Ivy League Lacrosse Championships and competed in the 2002 National Title game and in the 2004 Final Four. Today, the program continues to be one of the most talented and competitive teams in the country. To compete successfully at that level—all while managing an intensive academic course-load—requires both a high level of commitment and an even higher degree of self-discipline, effective time-management, preparation, and focus. That’s the case for any student-athlete across the country; but the level of commitment and self-discipline necessitated at Princeton is unmatched. My student-athlete experience on the Princeton Varsity Lacrosse Team enhanced both performance on the field and enjoyment in the classroom. Success in a Woody Woo seminar and success on the Class of 1952 field were not mutually exclusive; they reinforced each other.
During my career, the skills of self-discipline, focus, teamwork, strategy and time-management that I was fortunate to cultivate as a Princeton student-athlete have been instrumental—as an advisor, investor, colleague, mentor, founder, and entrepreneur. In the world of mergers and acquisitions, serving as an advisor to multi-national companies, private equity firms, and entrepreneurial ventures requires a commitment to delivering high-impact solutions to clients in connection with complex—and often high-stakes—transactions. This is especially the case today in structuring and negotiating M&A transactions and other commercial arrangements involving China. Teamwork and focus are prerequisites.
The student-athlete experience on the Princeton Varsity Lacrosse Team has also afforded unique career opportunities to continue to give back to communities in need across the country. For example, because of my Princeton lacrosse background and corporate law expertise, I was invited to serve as the pro bono counsel for Harlem Lacrosse, a leading non-profit organization that supports at-risk youth across the country through academic mentoring and lacrosse training. Harlem Lacrosse is an extraordinary organization. I’ve been humbled to have the chance to be a (very) small part of such a wonderful cause. It’s helping kids. It’s changing lives.
BT: What is a common quality among successful business professionals that you’ve observed during your career?
DW: The terms “trust, integrity, and partnership” are emblazoned on the letterhead of 52 Capital Partners. There is a reason for that. They are the bedrock principles of my firm. They’re core to our relationships with our clients. The most successful business professionals I’ve had the pleasure of working with or observing in my career are unwavering in their commitment to cultivating relationships based on trust, integrity, and partnership. And they share in my firm’s commitment to upholding those principles. Technical skills and advanced degrees become meaningless in the absence of dedicating oneself to total integrity at all times. We hire professionals and we serve clients who share in our commitment to trust, integrity, and partnership.