Thursday’s Live session welcomed Jonathan Bloom, Business Development Director at Perkins Coie, a leading US Law Firm. A former finance lawyer turned advisor working closely with founders, investors, and emerging companies. Bloom’s career spans over two decades in institutional finance before founding his own business, an experience that reshaped his perspective on governance, control, and legal advice.

From Structure to Lived Experience

Bloom’s central insight stems from the contrast between understanding legal structures intellectually and experiencing them as a founder. While he had deep technical expertise in structuring capital and governance, he underestimated how those structures “activate” under pressure. This shift, from advising on mechanisms to living within them, fundamentally changed how he views legal advice.

He emphasised that legal frameworks often function exactly as designed, but founders are rarely prepared for how those mechanisms feel when triggered in real-world scenarios.

Relational vs Structural Thinking

A key theme of the session was the divergence between how founders and institutions interpret governance:

• Founders tend to interpret agreements relationally, shaped by trust, belief, and shared vision.
• Institutions operate structurally, focusing on downside protection, control rights, and future contingencies.

In early-stage environments, these perspectives coexist comfortably. However, under pressure,missed targets, down rounds, or strategic disagreements, they diverge. Founders often perceive this as a breakdown in relationships, whereas in reality, the structure is simply operating as intended.

The “Gratitude Trap”

Bloom introduced the concept of the gratitude trap: when founders secure investment, they are often so grateful for belief and backing that they deprioritise negotiating protective provisions.

This emotional context leads founders to sign agreements based on optimism and trust, rather than a full appreciation of how those agreements may behave under adverse conditions.

Where Blind Spots Arise

Blind spots are not hidden clauses but unexamined consequences. One example discussed was board composition:

• Early boards appear balanced and collaborative.
• Over time, as capital structures evolve and expectations shift, boards become instruments of control.
• Founders may continue to view boards as supportive forums, while structurally they operate as decision-making bodies aligned with shareholder interests.

This misalignment becomes most visible during moments of conflict.

The Legal Profession’s Learning Gap

Bloom highlighted a systemic issue within the legal profession: lawyers are trained on successful deals and completed transactions. There is limited visibility into what happens years later when agreements are tested. Failures, where governance provisions create unintended or harmful outcomes, are rarely analysed or shared. This results in a broken feedback loop, where the same blind spots persist because the profession optimises for deal completion rather than long-term outcomes.

Governance Under Pressure

Discussion on board dynamics emphasised that polarised boards are typically the result of structural issues embedded early. Voting mechanisms rarely resolve conflict; they often entrench positions. Effective governance depends on pre-designed escalation frameworks, such as deadlock resolution mechanisms, clearly defined decision rights, and independent directors with specific mandates. Attempting to design these mechanisms during conflict is ineffective, as leverage is already lost.

Should Better Governance Be Standard?

Bloom argued that escalation frameworks and conflict-resolution structures should be standard practice rather than advanced provisions.

Every board will encounter disagreement; the critical question is whether the structure anticipates and manages it effectively, or whether decisions are improvised under pressure.

The Role of Legal Advisors

A recurring theme was the role of lawyers in balancing founder optimism with structural realism. Bloom described his approach as deliberately stress-testing assumptions, considering how scenarios unfold if things go wrong, not just if they succeed.

He clarified that this is not about pessimism but preparation:

• Understanding how agreements behave enables founders to act more confidently.
• Better-informed founders can pursue growth more boldly, not less.

Blind spot insights

• Governance documents are interpreted differently by founders and institutions.
• Most issues arise not from drafting errors, but from misaligned expectations.
• Legal advice should extend beyond explaining what documents say to how they behave over time.
• The profession would benefit from analysing failures, not just successes.
• Early-stage governance design is critical; waiting until conflict arises is too late.

Bloom’s work, including his book Blind Spots, aims to make these patterns visible earlier, bridging the gap between what founders believe they are agreeing to and how those agreements operate in practice.