NEW YORK--(BUSINESS WIRE)--LexShares, a crowdfunding platform that enables individuals to invest in litigation, launched its service today. The platform connects accredited investors with plaintiffs in commercial lawsuits in order to make an equity investment in a specific case. If the plaintiff prevails, the investor will receive a portion of the proceeds, from a settlement or court judgment, proportionate to the investment. LexShares can be accessed at www.lexshares.com.
“LexShares provides a transparent, economically rational and efficient means for connecting plaintiffs with investors to fund their commercial legal claims,” said Jay Greenberg, Co-Founder and CEO of LexShares. “In doing so, we hope to provide plaintiffs with equal access to justice and investors with access to a new asset class that is not correlated with broader capital markets.”
Greenberg, formerly part of Deutsche Bank’s technology investment banking group, founded LexShares with attorney Max Volsky, an alternative markets engineer and pioneer in litigation finance and the author of Investing in Justice. Volsky has overseen more than 10,000 investments in legal claims since 1999 and is the founder of litigation finance fund LexStone Capital.
“Financing is key to the success of a lawsuit. Large companies often have an unfair advantage because they have virtually unlimited access to legal resources that individuals or smaller companies do not,” explains Max Volsky, Co-Founder and Chief Investment Officer at LexShares. “Our mission is to even the playing field.”
LexShares targets a broad range of commercial legal claims at all stages of litigation. It operates using best practices in ethics and professional responsibility, and has integrated multiple privacy layers into the platform to protect all parties. All legal claim investment opportunities posted on LexShares are reviewed by its legal and securities professionals and are offered through WealthForge, LLC, a registered broker-dealer and member FINRA / SIPC.
How it Works
Plaintiffs apply to have their cases posted on LexShares and, if they are considered to have strong merit, are posted to the platform. Once posted, accredited investors can review the case and decide if they want to invest. Investors are able to track litigation activity related to their investment. If the plaintiff wins, the investor receives a portion of proceeds; if the plaintiff loses, the investor forfeits their investment.
"Litigation finance is maturing. The next logical step is using a technology platform like LexShares to broaden access to this asset class and equalize access to the legal system." said Richard Painter, a securities law professor at the University of Minnesota Law School, who in 1995 wrote one of the first law review articles urging broader use of litigation finance, and from 2005 to 2007 served as Associate Counsel to the President and chief White House ethics lawyer.
LexShares has already funded a case with a claim value of more than $40 million and currently has multiple other legal claim investment opportunities available for investment.
LexShares recently closed a seed round of funding led by Atlas Venture with participation from angel investors. “Litigation finance is not a new concept, but LexShares brings a new level of transparency and accessibility to the process that enables any accredited investor to participate in a potentially lucrative alternative asset class,” said Chris Lynch, partner at Atlas Venture. “With Jay and Max, we’ve backed an incredible team.”
LexShares is an online marketplace for investing in litigation. It connects plaintiffs in commercial legal disputes with investors to fund their cases. Based in New York City, LexShares is privately funded by Atlas Venture and prominent angel investors. For more information, visit www.lexshares.com.