LEXIT is the first ever marketplace able to facilitate M&A and IP transactions through an online platform, powered by blockchain.
In this article we will dissect some of the finer points and examine how it stands to connect buyers and sellers from around the world, while it revamps the traditional system and makes it much, much better at about a quarter of the cost.
The transaction costs in searching for potential buyers for your IP (seller’s perspective) can be prohibitive to many SMEs; equally, as a buyer, looking for patents, technology, soft assets and company branches can be thankless, time-consuming, and costly.
Blockchain technology not only makes it possible to securely verify a deal, through immutable smart contracts, but it can make M&A processes complete up to four times faster.
LEXIT wants to connect trades across the globe
There is currently no single, straightforward way to shop around your intellectual property. Through the use of industry experts and market participants, the LEXIT platform seeks to create a sales opportunity where your IP can be seen by potential buyers from across the globe.
This could be game changing for companies and startups who know the pain of having IP that they won’t use themselves, but is effectively wasted due to the difficulty in finding buyers.
LEXIT removes the traditional high barriers to entry and promotes near frictionless trade, so a circle of potential participants is widened to include a range of SMEs who were previously unable to access the global M&A market.
Users will fulfill one or more of three roles on LEXIT
Those searching for IP, assets or startups in order to grow their businesses might scour the marketplace to scout for good pickups.
These will be users looking to sell IP or a company, generally speaking. These could range from businesses who hold extensive patent portfolios to professors managing the IP of their research institute. There are no real limits though; a taxi firm liquidising assets could list its fleet of cars, for example.
A range of incentives will bring experts to the platform; they are required for evaluating IP and companies listed on the market, as well as to provide legal assistance.
Highly specialized experts from specific fields can help to determine the value of certain patents. Accountants, meanwhile, can help carry out due diligence by looking at the books of companies to be sold, while lawyers assist with drafting purchase agreements and ensuring the transfer is legal of both parties’ jurisdictions.
Creating in-built integrity on the platform
Three data points can be used to rate the quality of an assessment: the seller’s estimate, the assessor’s estimate, and the exit value (or actual price paid).
The closer the assessor is to the exit price, the higher the quality rating they receive. This should incentivise assessors to help sellers discover the true value of their assets, IP or company and to sell at a higher price, while also reducing the chance of overly speculative listings and maintaining the overall quality of listings.
In the context of an auction there is a second rating mechanism whereby an assessor is paid in LXT for the insights given.
Since the marketplace largely depends on accurate information, it is important to incentivise providing such information regardless of the auction outcome.
An LXT payment carries more weight than a five-star rating because it has true monetary value.
Why the LEXIT Token (LXT)?
The LEXIT marketplace relies heavily on network features such as listing fees, anti-spam payments, monetarily-backed ratings and revenue sharing among participants.
This means that a token is essential to make things run as smoothly and quickly as possible.
We’re delighted to announce that our token sale for LXT is now underway.