LEXIT ICO Review Part 1: Tokenizing the Mergers & Acquisitions Industry
LEXIT is a first-of-its-kind blockchain project aiming to tokenize the Mergers & Acquisitions marketplace. From small startups to large enterprises, LEXIT is building a platform on which to buy and sell companies as well as Intellectual Property.
This weekly, 5-part series will dig into what makes LEXIT stand out in a deluge of ICOs. There’s certainly no shortage of projects that want to trade you some ETH for their tokens!
In case you missed them, here’s where you can find more blog posts covering LEXIT:
Disclaimer: This is not financial advice. I’m not a financial expert by any stretch of the imagination. Most information within this article is speculative and merely my own personal opinion. Always conduct your own research before investing in anything, and always remember that what you do with your money is your decision to make.
I plan to receive a small allocation of tokens for creating this content. That said, I will do my best to remain unbiased and fair. I try to avoid all FOMO and FUD and never wish to impart those emotions on my fellow crypto-heads.
FYI: Certain countries are excluded from participating in the current token sale. Don’t forget to check the (exciting!) terms and conditions page. No need to fret if your country is blacklisted; you’ll merely need to wait until LXT tokens are available on exchanges.
Big Fish to Fry
Make no mistake about it, the Mergers & Acquisitions (hereafter M&A) market is absolutely ginormous. Millions and billions of dollars flow through the space on a daily basis.
In fact, it was only May of 2018 before worldwide dealmaking crossed the 2 trillion dollar barrier for the year. The first quarter alone saw over a trillion dollars in trade and we’re on pace to see the largest dollar figure ever recorded in the same year.
You like charts and graphs? Feast your eyes on this one. Although it resembles bitcoin trading sideways, it’s actually the global volume of the M&A space since 1999:
LEXIT’s Vision
Now, one crucial component of any ICO evaluation is ensuring the project aims to solve a real-world problem. A blockchain project should have a definitive reason to exist in the first place. If a project doesn’t even need a blockchain and can instead subsist from a simple eCommerce website, what are they even doing here?
Why does LEXIT exist? What problem are they trying to solve? I’ll let them explain it themselves:
Now that you know a bit more about what LEXIT is all about, let’s dive into why the project is uniquely positioned to capitalize on the deals flowing of this massive industry…
Nobody Has Put M&A on the Blockchain Yet
Given the sheer size of the global M&A industry, this is a bit surprising. There are trillions of dollars on the table and only one team has come to the realization that the space is ripe for tokenization? I guess hindsight really is 20/20.
Currently, the #LEXITco project has no competition on the blockchain. Not yet, anyway. Just like any project, on-chain or off, there’s always the possibility of another team coming along and doing it better and faster and cheaper.
Certain teams analyzed what other players were doing in the space and decided they could do it better. The bitcoin to ethereum evolution is a perfect example. Old Vitalik and company took existing technology and expanded its horizons.
But, it’s foolish to underestimate first-mover advantage. Considering the partnerships LEXIT has already established, it’d be a massive undertaking for another project to catch up. They’re too far along in the game to have any serious blockchain-based competition.
Local markets are another story altogether. And convincing individual localities to utilize LEXIT and its LXT token is critical to the project’s long-term success.
But that said, the M&A market is more than large enough to support several successful companies. If LEXIT manages to grab only a small portion of the overall market, they can do very well for themselves.
The M&A Industry is Ripe for Disruption
Shaking up long-held monopolies is part of what makes blockchain technology so exciting. Many industries are filled with big-name players happy to put up expensive, high walls around their exclusive garden. And the M&A industry is no exception.
One of the blockchain’s finest attributes is the elimination or minimization of the middleman. Think of how many (often leaning towards the shady side) intermediaries exist today. And then think of what service they truly provide.
Whether it’s artwork or cars or real estate, these middlemen have the goal of getting in between buyers and sellers. Although they provide value in certain circumstances, they have no product of their own and often charge high fees.
And if they’re part of an exclusive club, they sometimes give themselves license to extort.
The middleman’s goal is to take as much commission as possible, from both buyer and seller if possible.
Since an industry like M&A transacts such a high dollar value, there are bound to be enormous, cash-heavy companies that do their best to suppress the little fellas. If any of the smaller companies get too big for their britches, a bigger company may just forcibly add them to their portfolio.
Minimizing the threat of big corporations throwing their weight around will help level the playing field for all participants. M&A tokenization vastly lowers the barrier of entry for those looking to sell a business or its IP.
Visibility is Key
The M&A industry is begging for transparency. In fact, creating a trustless solution is the best way to operate and I’ll tell you why.
Let’s pretend you and I are partners of a company — we’ll call it LiquiChain — and we’re looking to sell to the highest bidder. Unaware of a blockchain solution, we decide to go the traditional route.
We turn to friends and advisors and put the feelers out to gauge interest. Since our business network is very limited, we don’t get any interest beyond a half-hearted, “I’ll ask around.”
Determined to make a sale, we seek help from an M&A consultancy service. One of the first experts we speak with happens to be a lawyer. After divulging the details of our business, he agrees to help us out for a $10–20K deposit.
But LiquiChain is barely above water and gasping for cash. Other than climbing deeper into debt, we’re unable to afford the lawyer and start exploring other avenues.
You see, there’s a certain chicken/egg scenario here. We’re in need of money, which is why we’re selling our business in the first place. Yet we need a large sum of money just to sell. Yikes. We may languish for years or even declare bankruptcy while hunting for a buyer.
And if we do actually find a buyer, they’re most likely a stranger. We have to trust them to follow through on the terms of the sale. If they don’t we may need to resort to costly legal action.
But with LEXIT’s model, things work differently. Think of the project as the eBay of M&A. Rather than trusting a stranger to keep their word, we can sell upon a platform hosting pre-vetted buyers with a reputation on the line.
There’s lots of money to be made in the buying and selling of businesses. Legitimate entrepreneurs will work hard to keep their name out of the mud.
For a small fraction of what tradition dictates, LiquiChain can create a listing visible to a worldwide audience. And all users of the platform, even the viewers, are KYC verified. We’re not dealing with someone we hope we can trust. Rather, we’re operating on a platform with trust built into it.
Transparency for buying as well as selling will help mitigate any villainy. The bad seeds will continue to lurk in the shadows, afraid to permanently and publicly expose their deception on the blockchain.
Final thoughts…
LEXIT is vying for their share of a multi-trillion-dollar industry. The team aims to bring democracy to the M&A space while aligning themselves as a cheaper, faster, more transparent version of the outdated status quo.
Time will tell how LEXIT’s ambitious platform will perform. But because of the partnerships they’ve established, and especially because they have first-mover advantage, I certainly like where this project is headed.
Visit the LEXIT.co website to discover more about the #LEXITco project.
By the way…
If you like what you see here and need help getting your crypto message to the masses, I’d love to hear about your project.
Feel free to reach out to me here: blockchainauthor at Gmail
