LexShares is Launching New Online Marketplace
LexShares, a crowdfunding platform that enables individuals to invest in litigation, has launched a new online marketplace that enables people to invest in commercial lawsuits and get a portion of the proceeds of cases that are won.
New
York-based LexShares was started by Jay Greenberg, formerly a
technology investment banker at Deutsche Bank, and Max Volsky, founder
of litigation finance fund LexStone Capital.
LexShares
recently closed a seed round from Atlas Venture, led by Chris Lynch,
and several angel investors. It declined to disclose the size of the
funding.
The
company allows plaintiffs to apply to list on its platform. The legal
claims are reviewed and then offered through WealthForge LLC, a
registered broker-dealer. Accredited investors, those who meet the
wealth criteria specified by the Securities and Exchange Commission, can
then fund a portion of the claim. If the plaintiff wins, the investor
gets a portion of the proceeds. In losing cases, the investor gets
nothing.
According
to American Legal Finance Association, the legal funding industry began
around 1997 when personal injury claims were funded by small companies.
The industry has grown. The association, for example, which focuses on
injury claims funding, says it has 31 members, up from nine in 2004.
Source: Wall Street Journal
