Choosing a Fund Model Over Originator

How do you scale from a $10M first fund to managing over $1.5B — all in one of the most capacity-constrained asset classes on earth? In this episode, I talk with Eva Shang, Co-founder and General Founder of Legalist, about dropping out of Harvard, getting into Y Combinator, pivoting from legal analytics to litigation finance, and raising their first $10M fund long before they had any track record. We discuss why Legalist chose the fund model over the venture-backed originator model, how they deployed their algorithm to find late-stage cases at scale, why litigation finance is capacity constrained, and how Legalist expanded into adjacent strategies like bankruptcy, mass torts, law-firm lending, and government receivables.

Highlights:

• How Legalist began as a data-driven legal-analytics platform.
• Why the team shifted from software to asset management.
• How technology identifies litigation, bankruptcy, and receivables opportunities.
• The role of public-records sourcing and automated case screening.
• Why Legalist focuses on uncorrelated, niche credit strategies.
• How Legalist evaluates risk in litigation finance.
• How the team structures underwriting across legal and credit factors.
• Why government receivables and bankruptcy claims require specialized processes.
• How Legalist works with law firms, claimants, and contractors.
• Eva’s philosophy on building teams, culture, and long-term systems.

Guest Bio:

Eva Shang is the Co-founder and General Partner of Legalist, an asset manager specializing in technology-enabled investments across litigation finance, bankruptcy, law-firm lending, mass torts, and government receivables. Eva co-founded the firm in 2016 after leaving Harvard and entering Y Combinator, and has led Legalist from its $10M debut fund to over $1.5B in AUM across multiple strategies.

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Stay Connected with Eva Shang: LinkedIn: https://www.linkedin.com/in/eshang/ Legalist: https://www.legalist.com/

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(0:00) Introduction (2:20) Y Combinator insights and venture capital decisions (4:51) Emphasizing IRR in building a sustainable business model (6:48) Lessons from early fundraising and growth strategies (9:36) Diversification and understanding capacity-constrained assets (13:33) Fundamentals of litigation finance and sources of alpha (18:08) Exploring the government receivables strategy (20:38) Cultivating long-term vision and independent mindedness in entrepreneurship (24:33) Reflecting on past decisions and the importance of team building (26:14) Closing remarks