ALSP Exigent has announced today the launch of an investment fund that will focus on ‘post-start ups who are at the B funding stage’ – (such a stage is usually considered to be between $10m and $15m in terms of investment)- with the aim of investing in companies that work in the areas of ‘blockchain, smart contracts, data visualisation, machine learning’ if they can ‘demonstrate ROI’.
The fund is called Bright Minds Capital Partners and the founders have talked up the point that they will invite selected parties to co-invest in the companies they target. At present the BMCP website lists two portfolio companies:
- LexChain – which is a solution for immigration needs – there’s no link provided and AL cannot find one. There is no listing in Crunchbase of previous investments.
- Muve – which appears to be the trading name of the UK-based Connect2Law Limited legal group, and describes itself as a ‘new law firm’, and what seems to be behind the website is a regular bricks and mortar conveyancing firm, although it’s not entirely clear how it’s all structured.
The idea of corporates already in the legal space making equity investments in legal tech is not that unusual, for example DocuSign has done so at least twice now.
Nicola Stott, CEO of BMCP, and who founded Exigent, said in a statement: ‘We’re the bridge between angel investors and Private Equity. We don’t have a typical VC structure with an investment director who has no clue of how to run a business. Everybody on our team has real life experience and has seen this before.’
There’s also a video where David Holme, Chairman of BMCP, shares his views on how things work at present for legal tech investments – and it seems he’s also not that impressed.
It’s early days, but there are a few things that made Artificial Lawyer pause for a moment. The fund has not declared how much it has to invest, or has invested in the two businesses it lists, even though the website states that they are looking for ‘Series B’ investments – which are usually for quite well-developed start-up companies.
Also, LexChain…? Maybe it’s just Artificial Lawyer, but this site has never heard of that company – and would a ‘blockchain-based immigration startup’ really be showing significant ROI, as the fund says it’s looking for?
And, Muve…? Not exactly a tech company.
And the partners who will be investing in future targets? Also not mentioned. They will be invited at some point.
Artificial Lawyer has asked Exigent to respond to a few questions on this. Hopefully AL will update this piece when we hear back.
Overall, why take equity investment from an ALSP’s own fund? It could be a good idea, look at what Elevate is doing – although in that case the law company is buying the targets it’s interested in and integrating them into a wider offering. This would appear to be, at least initially, an equity investment play – as if they just wanted to acquire a company whole then there’s no need for a separate fund.
Maybe this is a great opportunity, but when there are so many experienced investors putting significant money into legal tech companies, from Goldman Sachs to Seedcamp, it will be interesting to see how BMCP fares.