Democratizing Investing Part 2 - Litigation Financing
The part 1 of investment democratization focused on a niche asset class, private equity (which also invests in litigation btw) where the concept was to onboard users digitally and lower the ticket sizes by using a platform approach to pool resources together so that the minimums of the actual investment can be met. This similar approach can be put to a host of new uses like Art, Commercial Real Estate, Sports Franchises, Litigation financing and so on.
Litigation Financing is not new and has been in existence for decades. This is one of those typical tech businesses that have productized the user onboarding and used the power of a platform business model to make discovery easy (demand for investible cases), added a layer of intelligence on top of it (determine whether or not investible, due diligence, precedents etc.) and connected the supply (of capital) - all on a single platform.
Seems to be an easy one but the underlying economics and the impact of Dunning-Kruger effect being at play for almost every plaintiff and the attached lawyer can impact the IRR (even capital protection) to a very considerable extent.