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30% ROI Anyone? (2) – What Is It? Definition
Continuing from the previous post, what exactly is this new approach?
It’s patent litigation financing, which involves funding lawsuits specifically for patent cases.
To be honest, most people get scared at the mere mention of the word “lawsuit.” Even with something as straightforward as legal lending for car accident cases which we shared in our previous series, where you’re representing the plaintiff to get more compensation from car insurance companies and there’s also ATE insurance cover the claim, people tend to get tuned out at the mention of “lawsuit.” and shut off anything after that, not even giving a few minutes to learn about the details, let alone a highly specialized case category in the patent space.
Initially, I wasn’t interested in their model because it seemed very black and white: if you win, you win big, but if you lose, you get nothing. And fighting for a patent litigation is much more challenging than a car accident case. So, I asked them, how is it possible to get your principal back plus 20%-30% profit in just 12 month as the claimed?
They said it’s quite easy because most defendants settle quickly, and it doesn’t even need to go to trial.
I responded, wait, then why in all your previous events did you talk about “go big or go home” lawsuits?
They were also surprised, saying, “A 20%-30% return rate is not very impressive in this space. If we don’t talk about cases with $80-100M in damages and potential returns of 100%-300% if we win, who would be interested in listening to us?”
😓 In my mind, I was like, dude, which planet are you on?
I said, you’ve had so many events and talked to me several times, yet you’ve completely missed the point. Let’s do this: I’ll ask you all my questions in a sequence, one by one, and you just give me straight answers without going off on tangents. You guys have no idea what investors are looking for, so just go with my flow.
They did happily, I got all my answers, which I’ll share how it works according to them in this series. As a standard practice on all my content, I also did a Q&A video series with them, so if you are interested, feel free to reach out to us to ask for the link for more details. So in this series, I will take you through the following topics:
1. What is patent litigation financing?
2. Why does patent litigation exist?
3. Why are there still opportunities for individual investors?
4. Who are the lawyers?
5. Besides lawyers, who are the other main players?
6. How are leads generated?
7. How are cases screened?
8. What is the general timeline for each case from start to finish, and what happens at each stage?
9. What is the typical settlement amount for each case?
10. What is the typical timeline for settlements?
11. How does the industry’s settlement success rate compare to theirs?
12. How does this special model achieve principal and approximately 30% profit back within 12-18 months, and why are all parties willing to settle?
13. What is the general timeline for each investment from case start to finish, and what happens at each stage?
14. What happens if a case falls through?
15. What happens if a lawyer drops out?
16. How do you exit the investment?
17. What is the profit distribution order, and how is it allocated to each participant?
18. What are their track record?
19. What is the risk?
20. What are the past performance and return rates?
21. What are my real numbers after I tried them out with my own money?
22. How can you participate?
Stay tuned for the next post!