Meteor Games: LEXIT Token Review

INTRODUCTION

LEXIT is the first marketplace for IP and entire companies

LEXIT allows entrepreneurs to trade intellectual property, copyrights and technology from discontinued projects, and even sell whole startups.

Blockchain-based tokenization models and the disintermediation of appraisement and matchmaking services allow LEXIT to make Mergers & Acquisitions as easy as selling a car or real-estate.

LEXIT Is Powered By A Distributed Network

SERVICE PROVIDERS

All projects listed on LEXIT are verified, analyzed, and assessed by a distributed network of independent appraisers and industry specific specialists. LEXIT’s service providers are screened, high-quality contractors, subjected to a rating and reputation system, generated through buyer input

GLOBAL PARTNERS AND MATCHMAKERS

To cut the best deals in the industry, LEXIT maintains a global partner program of highly connected players in the Tech ecosystem. LEXIT’s partners are incentivized to reach out to their large business networks and connect thousands of buyers and sellers.

How LEXIT Streamlines M&A - A Comparison

Why Tokenize It?

Introducing a token (LXT) to the LEXIT marketplace environment allows us to base evaluation and matchmaking services on a distributed and competitive network of independent, yet screened assessors - creating market dynamics which promote fast, transparent and fair deals.

INTRODUCTION (2)

Introduction: A New Frontier for M&A Transactions

Mergers and acquisitions (M&A) provide organizations, both large and small, with an opportunity to accelerate strategic growth. By purchasing another company, an acquirer can gain access to critical research, intellectual property, human capital, and other assets at a much faster rate than could be achieved in-house.

However, at present, the M&A process is flawed and outdated. According to the Small Business Administration, roughly half of US businesses with employees fail within five years.1 When businesses fail, they often take their hard-won knowledge, technologies, and human capital down with them. To date, there has not been an efficient way for sellers to find buyers who can carry the torch of a faltering business. In turn, buyers usually do not have a consistent source of deal-flow outside of their inner circle. Furthermore, even when a buyer and seller do manage to find each other, the process itself is unjustly complex, involving batteries of corporate lawyers, investment bankers, financial advisors, appraisers—all of whom come at a high cost.

Just as eBay revolutionized peer-to-peer commerce and Airbnb brought aggregation platforms to the forefront, LEXIT will bring increased efficiency and liquidity to M&A transactions, all within one secure space. We do this in the following ways:

1. With a marketplace that brings buyers and sellers together, giving them global access to assets and opportunity;

2. Through the addition of assessors and field experts who help appraise assets;

3. With a secure, digital deal room where transactions are finalized quickly;

4. With an international network of business partners, to extend reach and promote communication;

5. By utilizing blockchain technology, for its security and transparency;

6. And through token economics, to incentivize and drive engagement.

2. M&A Opportunities and Challenges

Why Do Companies Undertake M&A Transactions?

Mergers and acquisitions allow ventures that are fledging or struggling to find support while giving established companies the opportunity to attain the tangible or intangible assets that enable them to reach greater heights. It is often easier to obtain a license patent, or source code from outside of the company than to utilize valuable hours and funds to perform research and development from within. The acquisition of a local company, specialized start-up, or innovative technology can help an established company enter new markets more quickly than if that company attempted to expand organically.

What Are the Barriers to Accessing the M&A Market?

What we think of as modern M&A activity has existed since the late 19th century.2 As would be expected from anything that has been around for over 100 years, the M&A process is in need of an update in order to better serve the requirements of today’s buyers and sellers. At present, the internet, coupled with blockchain technology, is moving the world toward more decentralized, democratized ways of doing business. Archaic systems powered by opaque negotiations, powerful inner circles, and high costs are quickly becoming outdated.

1. Pricing Is Difficult

2. Counterparties and Experts Are Not Easily Accessible

3. Transaction Costs Are High

4. Intellectual Property Challenges

The LEXIT Ecosystem

The LEXIT Platform: Our Marketplace and Deal Room

The Marketplace

LEXIT is launching the first global M&A marketplace. Our Marketplace will increase accessibility to global M&A opportunities by allowing sellers of any kind to create auction listings for their companies and IP. LEXIT is free to join, but there is a small listing fee for each auction. Then, acquirers of any size can browse these auctions— eliminating the need to scour the globe and exploit personal contacts for promising counterparties. Once sellers post their listings, buyers can either browse through all the sell offers or search for offers with specific attributes, like industry or location. After receiving bids, the seller makes the final decision regarding which bid to accept. Buyers can also communicate with sellers before bidding in order to get more information about the listing.

The Deal Rooms

Our virtual Deal Rooms are secured spaces where non-disclosure agreements are signed, terms are negotiated, and transactions are finalized. Since Deal Rooms will hold confidential documents containing trade secrets, robust security frameworks will be used to reduce risk of breach. Access to each Deal Room will be tightly controlled, open only to the relevant buyer, seller, and selected experts. These experts can be invited to Deal Rooms as described in the “Assessors” section below

Traditionally, M&A negotiations have revealed the extent to which a power imbalance exists between sellers and buyers—whoever controls the most resources also controls the deal. In contrast, LEXIT aims to level the playing field by giving all participants the same access and guidance. We will achieve this by maintaining a pool of experts who are on hand to participate in the Deal Room. Instead of gaining advantages simply by being a larger organization, participants will gain advantages by being good actors in the ecosystem. By gathering data on deals that take place on the platform, LEXIT will build track records for each party involved—buyers, sellers, and assessors.

The Role of Blockchain Technology

Because LEXIT brings together complete strangers from around the world to undertake high-value transactions, these transactions must be completed in a way that makes trust irrelevant. It is not reasonable to expect these strangers to trust each other, so the concept of trust must be done away with completely. Blockchain technology makes these kinds of trustless transactions possible

Our Technical Approach

On the LEXIT platform, both proven and pioneering systems will coexist. We incorporate established technologies (databases, web development frameworks, and smart phone apps) with innovative technologies (blockchain with smart contracting capabilities) aimed at a common goal: to help establish trust among interacting parties throughout all layers of the platform.

The Participants

LEXIT Revolutionizes Mergers & Acquisitions

Sellers and Buyers

As described in the “Marketplace” section above, sellers are those with assets that they list on the LEXIT platform. These assets can take the form of a company or IP that the owners wish to sell. Examples of sellers include a company with a patent portfolio or a professor who manages the IP of his or her research institution. It is the seller’s responsibility to provide sufficient information to satisfy listing requirements. Sellers are also expected to interact with buyers and assessors to facilitate the valuation process

Assessors

During both the Marketplace and Deal Room phases, LEXIT buyers and sellers can access specialized experts who provide personal observations—or “views”—on the listings and transactions. In the LEXIT ecosystem, these experts are called “assessors.” Both independent industry experts and advisory firms can join the LEXIT ecosystem as assessors. Assessors must be vetted and approved in order to participate on the LEXIT platform.

Once approved, assessors may then be selected to offer views on listed transactions. Sellers choose up to 10 assessors whom they can invite to post views. A seller can also accept requests from assessors who have expressed interest in providing views for that particular seller’s listing. In either case, buyers will be more likely to select assessors who have assisted with previous listings and received high ratings. Selected assessors then offer their personal views of the listing. However, they cannot, in any official capacity, judge or decide the amount, value, quality, or importance of a transaction. Assessors who are selected to post will be paid a standard amount of LXT upon submitting a view. This compensation is not related to the length, quality, or any other characteristic of the transaction being considered—every chosen assessor who posts a view will be compensated.

Anti-Fraud Detection Team

In addition to providing approved assessors with the opportunity to write personal views and participate in Deal Rooms, LEXIT will also employ an anti-fraud detection (AFD) team to monitor all activity on the platform. The AFD team will not give public opinions about transactions. Rather, the team will filter unwanted transactions before they are listed on the platform. Any listings that are suspected to be fraudulent or related to any illegal activity will be barred and reported to the appropriate authorities. As the guardians of the ecosystem, members of the AFD team will be LEXIT employees and undergo a rigorous vetting process before being accepted.

Outside Service Providers

LEXIT is developing a network of outside service providers to assist buyers and sellers with professional valuation, and advisory, legal, and accounting services. Web links to these service providers will be provided via our online platform. However, any services offered must be agreed upon in a contract that is formalized and signed completely outside of the LEXIT ecosystem. Outside service providers are permitted to become assessors and submit personal views, but they cannot assist in an official capacity unless engaged separately through a contract that is external to the platform. Service providers must abide by LEXIT standards in order to become—and remain—part of our network

LEXIT Global Partners

LEXIT has established a Global Partnership Program (GPP) in order to generate a consistent deal flow on the platform and to ensure that a variety of companies are included in the LEXIT ecosystem. To this end, LEXIT is establishing partnerships with international accelerators, incubators, startup hubs, industry associations, venture capitalists, and M&A firms. As part of the GPP, we offer generous fees for our partners: 50% of the LEXIT transaction fee for any successful transaction completed on the platform thanks to a Global Partner’s introduction. Furthermore, for a period of three years, Global Partners will receive 5% of every transaction sourced from their affiliates—new partners they introduce to the platform

External Partners