Frequently asked questions

LexShares is a leading technology platform for commercial litigation finance, and takes an innovative approach to originating and financing high-value commercial legal claims. LexShares funds litigation related assets through both its online marketplace and dedicated litigation finance fund. Founded in 2014, the company is privately owned with principal offices in Boston and New York City. The LexShares team is comprised of experienced litigation, finance and technology professionals. You can learn more about us here.

If you are an attorney or plaintiff, you can start here and submit your case for review. If you are interested in investing in legal claims, you can start here.

If you are an attorney or plaintiff, you can start by submitting your case here.

• Anti-competitive claims
• Banking and insurance disputes
• Construction and real estate disputes
• Contract disputes
• Conversion
• Fraud
• Industrial products liability
• Intellectual property and copyright infringement
• Whistleblower, qui tam

Our involvement as passive investors in legal claims does not affect the attorney-client privilege or put attorney work product at risk. We do not request access to attorney-client privileged materials and we are always cognizant not to risk waiver of privilege. Recent court decisions have upheld that attorney work product shared with third-party funders is protected and communications with third-party funders are covered by the “common-interest” doctrine.

• Legal merits: Cases must have strong legal merits. Legal merits means a sound basis for the case and a clear understanding of the claim’s value. Estimated time to resolution is also taken into account.​ 
• Legal team: The case must be represented by experienced counsel with strong track record of success in the related legal area. Counsel may be working on a contingency or hourly basis. 
• Defendant's creditworthiness: Defendants must be well-capitalized entities with an ability to pay damages awarded as a result of litigation. 
• Costs of litigation: The expected costs of the claim must be foreseeable. An estimated budget is required from counsel to consider a case for funding through LexShares.

A number of factors are considered when evaluating cases for posting on LexShares.

• Legal merits: Cases must have strong legal merits. Legal merits means a sound basis for the case and a clear understanding of the claim’s value. Estimated time to resolution is also taken into account.​
• Legal team: You must display a strong track record of success in the related legal area. You may be working on a contingency or hourly basis.
• Defendant's creditworthiness: Defendants must be well-capitalized entities with an ability to pay damages awarded as a result of litigation.
• Costs of litigation: The expected costs of the claim must be foreseeable. An estimated budget is required from counsel to consider a case for posting on LexShares.

Once a case investment opportunity is posted to the LexShares platform, it is the investor's responsibility to evaluate the opportunity and make an investment decision.

LexShares' team of legal and investment professionals consider a number of factors when evaluating cases. These factors include:

• Legal merits: Cases must have strong legal merits, which means they must have a sound legal basis for the case and a clear understanding of the claim’s value. Estimated time to resolution is also taken into account. 
• Legal team: Plaintiffs must be represented by experienced counsel with a strong track record of success in the related legal area. Attorneys may be working on a contingency or hourly basis. 
• Defendant's creditworthiness: Defendants must be well-capitalized entities with an ability to pay any damages awarded as a result of litigation. 
• Cost of litigation: The expected costs of the claim must be foreseeable. An estimated budget is required from counsel to consider a case for posting on LexShares.

LexShares investors include high net worth individuals and institutional investors, including select family offices, hedge funds and asset managers.

The U.S. Securities and Exchange Commission (SEC) defines individual accredited investors as any person who reported annual income exceeding $200,000 on their past two tax returns, or currently maintains a net worth exceeding $1 million (individually or jointly with a spouse). Married individuals or spousal equivalents who jointly file taxes must report combined income greater than $300,000. 

The SEC expanded its criteria for accredited investor qualification in August 2020 to include Series 7, Series 65, and Series 82 license-holders, “knowledgeable employees” of a private fund, limited liability companies with $5 million in assets, family offices with at least $5 million in assets under management and their family clients, and certain other individuals who can demonstrate “clear measures of financial sophistication.”

Click here for the complete SEC definition of an accredited investor.

• Accreditation verification letter: Letter signed by a third-party (CPA, attorney, investment advisor, broker/dealer) of your choosing, verifying your status as an Accredited Investor. 
• Income proof: Tax returns or W2s for the past two years. 
• Asset proof: Copy of recent account or brokerage statements showing the value of your account(s) to be in excess of $1 million and credit release form. 

To prefund a deal, LexShares forms an LLC that will make the investment, and the LLC accepts its initial equity investments, entirely or primarily from one or more investment funds managed by LexShares affiliates. The LLC also receives a short-term loan from LexShares PF LLC to enable it to fund the case investment in full. After the LLC prefunds a case investment, LexShares investors that participate in the offering receive equity in the LLC, and the LLC uses the investor subscription proceeds to repay the short-term loan from LexShares PF LLC and pay fees and expenses, as described in the investor packet.

Prefunding of the case investment accomplishes several key objectives:

1) Prefunding utilizes capital sourced entirely or primarily from LexShares affiliates, which demonstrates our confidence in the deal and our vetting process.

2) Prefunding enables LexShares to offer certainty of funds to plaintiffs and attorneys, which allows for expeditious closings. The corollary benefit for our investors is that prefunding helps secure access to litigation finance opportunities. 

3) Investors that participate in deals that were prefunded will immediately own an interest in that deal. Without prefunding, however, investors would have to wait for the deal to be fully subscribed and for all participants to fund their portion of the funding amount prior to closing.

LexShares has a rigorous vetting process for prospective investments. This means that there will not always be an open case for investment on the LexShares platform. Investors who complete registration will be notified as soon as there is a new case available for investment. Investors are responsible for evaluating LexShares offerings and making their own investment decisions.

LexShares is committed to protecting the privacy and confidentiality of information. Please see our Privacy Policy and Terms of Use.

Yes, LexShares supports funding by non U.S. based investors through our online platform. Additional documentation may be required.

LexShares Marketplace Fund II (LMFII) is LexShares’ second dedicated litigation finance fund, with a target size of $100 million. Similar to LexShares Marketplace Fund I, LMFII provides institutional and individual accredited investors the ability to access a portfolio of litigation-related assets through a single fund allocation. As of June 10, 2020, LMFII is accepting commitments from new investors here.

LMFII has retained Seward & Kissel LLP as its legal counsel, BDO USA, LLP for tax and auditing services, and SS&C Technologies Inc. as its fund administrator. Additionally, LMFII has secured a principal protection insurance policy from AmTrust International Insurance, Ltd., an industry-leading global insurance provider. Investors can elect to cover all or a portion of their commitment to LMFII with this policy. 

You can read more about the launch of LMFII here.

LMFII follows a general litigation finance strategy, with the ability to make direct or indirect investments in legal claims by purchasing the right to receive a portion of any prospective recovery from such matters.

LMFII targets a broad set of litigation finance opportunities. These include commercial claims at all stages of litigation, portfolios of legal claims, law firm financing, and fee and settlement acceleration.

Yes, LMFII invests in legal claim offerings posted on the LexShares platform as well as in litigation finance opportunities directly.

Updates on LMFII's activity will be provided on a quarterly basis to investors through the LexShares platform. Quarterly updates include Fund financial and capital account statements prepared by third party fund administrator SS&C Technologies Inc. BDO USA, LLP has been engaged to provide investors audited fund financial statements annually.

LexShares Marketplace Fund I (LMFI) was LexShares’ inaugural litigation finance fund. LMFI was fully subscribed for $25 million as of January 2018. You can read about the closing of LMFI here.