“According to various social media posts and online sites which are proclaiming the potential for lucrative earnings by deciding to invest capital in lawsuit litigation, Yellowstone Capital Investments reports that this a trend worth watching to see how it plays out, and whether it will have a significant effect on the way investors choose to direct their money in 2018.”
Alternative investments are those which diverge from more typical mainstream types of investments such as stocks, cash bonds and mutual funds. Making the choice to invest capital in alternative investments may bring with it both pitfalls and rewards, and therefore must be carefully and reliably evaluated. Alternative investments may comprise a higher degree of risk.
Examples of alternative investments include private equity, hedge funds, some real estate ventures and more. Interestingly, one potentially exciting type of alternative investment is that of investing capital in litigation or lawsuits. While finance litigation has been around for a while, as of late, the sector has seen a major increase in the amount of capital being directed at it by investors.
Litigation finance has the potential to be lucrative for investors. In simple terms, the process is that investors fund lawsuits and then receive a cut of any settlement or cash award. While lawsuit and litigation finance contains the potential to win investors capital gain, as well as to empower corporate law firms and their clients, there are some downsides.
Detractors claim that litigation funding actually breeds additional, an often superfluous, lawsuits. It is true that there are legal and ethical obstacles to investing in lawsuits in the United States. However, since the majority of any legal financing arrangement will be structures not as a sale but rather as a loan, accompanied by complicated structures detailing on how and when returns are paid, interesting parties can easily find ways to bypass these types of legal concerns.
How litigation finance, which is by all reports increasing, will actually play out in 2018 remains to be seen.
“The industry of litigation finance first caught people’s attention when Hulk Hogan was facing off, in legal terms, against Gawker. Venture capitalist Peter Thiel gave Hulk a boost by investing capital in his ultimately successful lawsuit.” -Yellowstone Capital Investments LLC
NYC based startup, Mighty, is focused on litigation finance which describes the process wherein which investors help fund plaintiffs in a lawsuit in return for a cut of the legal winnings. Might got a big break just got a big break in terms of $9 million in equity funding plus $105 million more for its first investment fund. Mighty was co-founded by Joshua Schwadron and Dylan Beyno. While Mighty creates software for litigation finance firms, it also views litigation finance as a tool to help people gain access to the justice system. As such, its Mighty Capital investment fund will invest capital in lawsuits.