David Kay on Liti Capital’s litigation finance platform

0:04i'm ashton addison from event chain for investment pitch media in the crypto coin show and today on blockchain interviews we have david k the executive director and chief investment officer of lidi capital david welcome to the show and thank you so much for taking the time to be here today thanks for having me you're very welcome i'd love to kick it off

0:22uh for the viewers with just a little bit on your background in the space and then we can dive into liddy capital yeah absolutely so i actually started my career as a lawyer which thank god i left a long time ago um i was then an investment banker and then for the last 10 years i was i was one of the founders and the portfolio manager for what was a large

0:44private equity firm based out of new york uh when i left we had over a billion dollars of capital um and we were really focused solely on litigation financing and complex you know arbitrations and litigations that take place around the world so this is this is been in my blood for a long time um i took some time off for covet which was which was nice

1:06uh you know i was lucky most of the people that i know were you know were not affected uh and i had been traveling for about 260 days a year uh before that so it was good to connect with the family again um and then you know for the last year i've been sitting on boards of some larger uh public and private entities until i met jonas and the guys and uh when they told me this idea

1:32it it blew me away i didn't know that there was anything that could get me to you know come back into you know this kind of craziness uh full time but they did that's a great background and i can't believe you've been traveling that much and now being in the blockchain space it seems like you really can be anywhere but i know that your team is working on

1:52a bunch of litigations uh that that we can dive into and i don't think a lot of the viewers are probably familiar with litigation finance um and you know a lot of people understand finance but it's rare that they hear about litigation finance uh and what lady capital is doing maybe you could explain a little bit surrounding uh what exactly is litigation finance and how is lady

2:12capital involved in that yeah it's a great it's a great question so litigation finance in short is a process by which we help to finance the cost of litigations uh for people that couldn't otherwise afford it right so the best and in exchange we get a percentage of the upside uh and probably the best example is let's say ashton that you started a company

2:35okay event chain and two years from now huge co comes and says i'm gonna buy it from you for 15 million dollars and you're like great 15 million dollars i'm in i'm a seller you sign a contract and there's a clause in the contract that says that if you do anything that could hurt the brand they could terminate you and not pay you the 15 million dollars which you never

2:55think is an issue right you do something small like post the silly twitter picture of nothing with nothing and hugeco claims that you violated the contract they take your company right and they don't pay you now you know you didn't really do anything wrong okay um but huge co is willing to spend three to five million dollars to fight you in court for the next two to three years

3:20now your business is gone your income is gone and what do you do and you know the sad thing is you know what with most people what happens is they actually walk away uh you know this whole idea that the bad guys don't win is is actually not true um a lot of the time the bad boys and the huge goals of the world even if they do something that's not appropriate they win

3:42sometimes people will put up a little bit of money amount of slight defense and huge code will come in and say look you made your point you know we'll give you two to three million dollars to walk away which is a huge amount of money uh and almost everybody else takes that one what we do is something different what we do is we step in and we say no that's not appropriate this is

4:04ridiculous we will finance you the full cost of the litigation if we lose or you lose there's no liability for you you take 100 of the liability and if you win we'll take a percentage right let's say twenty percent now we stand up to huge co huge cost lawyers know of me and the great lawyers that we get from you we fight them and a lot of the time not

4:26every time but a lot of the time we went and now ashton you know you've walked away with 12 million dollars very happy to give us our three um you know and and everybody walks away happy so that's kind of a short example of how it works that's a great example thank you and hopefully that never happens with event change specifically in that example but

4:46uh uh i don't want 15 million if we win definitely um i know big companies when they try to take advantage of smaller companies and just draw out litigations and have expensive lawyers then that's obviously uh the time when you would need a litigation finance company at like lady capital and now with lady capital you're also incorporating blockchain technology and

5:11cryptocurrencies into it to help democratize access and a bunch of other advantages maybe you can talk about the specifics of liddy capital and how it's differentiated from a traditional litigation finance company yeah it's a great question i mean you know i was telling you i got dragged back into this and i kid about that but really what it was is uh

5:33you know one of the things that really upset me uh about the private equity space in the u.s generally um is that my parents couldn't invest in my private equity fund because they don't have a million dollars of liquidity my siblings couldn't invest in my private equity fund because as of now right outside of defy uh you can't invest unless you're an

5:56accredited investor which means you have to have about a million dollars to me uh that was ridiculous and it was always a problem right i know that i'm not out there saving babies but i genuinely believe and it has genuinely always made me feel proud uh to go out and defend the little guy and historically i've defended the widow guy to make thirty to fifty percent cash on cash

6:22returns every year for the one percent and the idea of being able to provide private equity for everyone which is my passion here is something that is so game changing and it is so the right path whether it's us at litty capital or somebody else you know this is the right path these types of returns um this type of industry i mean google hedge fund their private equity

6:48the returns are out of control um and some of the absolute stupidest people i know have more than a million dollars of liquidity and some of the smartest people i know don't and the idea that that is the dividing line between people that can get these returns uh never saturate with me and that's what liddy capital is about um litty capital is about providing

7:11these types of returns to everybody all around the world whether you're fifty dollars five dollars or five million dollars definitely and i completely agree and it seems and i hope that the rules are continuing to change because it does seem so unfair uh that the one percent can get access to uh these uh opportunities and sometimes it there's people that are more than

7:35capable and more than qualified to receive opportunities like this but they just don't have access to it so i'm really glad that you're presenting it in this way um could you talk more about how uh you know retail investors and the 99 actually can get access and and participate uh with lidi capital yeah absolutely so the way that we've set up woody capital is is there are

8:00there are two tokens um there is an there's an equity token which is the equivalent of a share in the company and we're a real company right it's an experience management team you know crypto is flooded uh with people that have ideas it's flooded with scammers which we should talk about you know our entire team is an experienced management team who's done

8:21this before we're set up in switzerland we're one of only a handful of companies that has actually gotten a a letter um and an approval uh from the swiss government from the swiss regulatory authority confirming that what we're doing is acceptable uh and you can own a share you know a part of us you can be a part of this movement by owning a token that equity token

8:44is then further broken down into what's called a wrapped liddy okay and the wrapped liddy is what trades on the different exchanges that we're set up on and that wrapped witty is what the 99 percent can go out and buy and sell two minutes one minute hold for three years stay with us you know whatever you want to do that wrapped liddy is that liquid mechanism uh for people

9:10to be able to participate it's a great explanation thank you and that is great to hear that you're also you know registered and approved in switzerland i think that also brings a lot of credentials uh to to the platform um so that's nice to hear and now in terms of actually generating the revenues you mentioned taking over litigation cases uh i was reading that

9:32liddy capital itself already has three high profile cases and you're working on expanding out can you talk about those cases and you know why you chose those or what are the qualifications in getting a case that you think has a high probability of winning and generating revenue for the company yeah i mean it's a great question uh you know the interesting part about this

9:55is that that part that that's the easy part right for me for the better part of the last decade uh i have been diligencing collecting working on and ultimately collecting capital uh for when we've gotten judgments uh litigation finance cases that that's what i do the the new part to me is actually the crypto side um and the blockchain side so it's a little

10:21bit of art it's a little bit of science uh you know just like anything else you get a feel for what's a good case the things that are important to us is obviously who is the plaintiff and who's the defendant there's all these rules around law and complicated statutes but you would be surprised at how many cases by experienced judges and juries alike

10:41that are decided based on who they think is the good guy and who they think is the bad guy right so understanding who is on both sides of it is hugely important where it's being litigated uh it is certainly much more attractive to be litigating a case in uh western europe uh or the united states than sub-saharan africa uh although we've we've taken on cases

11:02successfully in all of those places and then i would probably say one of the most important determinants and one of the things that's the most overlooked is who is the defender and that's important because at the end of the day a judgment is just the single most expensive piece of paper you've ever bought the game and what our job is is to actually get people paid

11:22and the odds of you getting paid does rely materially on the credit quality of the defense so understanding the defendant understanding their ability to pay and ultimately selecting those cases where there's a good plaintiff with a good story in a jurisdiction that makes sense and against the defendant that can ultimately pay you know that's that's basically the secret sauce

11:45now i told you so now now everyone knows that's great and thank you for that explanation uh david and that does make sense and uh sometimes it's just the good guys versus the bad guys and there are judgment calls that are made there so it's great to hear that insight from the experience that you have prior to you know introducing introducing the blockchain part of it as well

12:04and with liddy capital and the blockchain part i saw that your team recently closed a 12 million dollar private round as well and i know you're continuing to raise and there's a lot of excitement around lady capital so congratulations on that first of all uh and i'm curious what are the next steps with that what what is that capital going to be allocated towards

12:24yeah first of all thank you we're we're extremely excited uh we launched about three days ago we had a a very successful launch uh on a significant amount of volume and the support that we've gotten from the community is humbling uh and we are excited because this is really just the beginning for linear capital uh i think in terms of the capital that we've raised

12:47you know we've done what we're supposed to do right my job as the cio of woody capital is ultimately to build a portfolio of assets that will generate the types of returns that the the industry has done in the last 10 years and that i specifically have accomplished 30 50 cash on cash returns once we get started is the target uh and the way to do that is ultimately

13:10to take the cash that we raise and buy assets buy litigations and manage them so you're right we've done that with three litigations uh we've actually spent 10 of the 12 million dollars um on those three litigations and this is a really important point uh that i want to make sure that your viewers understand we are not a cryptocurrency we are an asset based company if bitcoin

13:36goes to a hundred thousand the value of the assets that are in our portfolio haven't changed if bitcoin goes to 5 000 the value of the assets in our portfolio hasn't changed the outcome is still going to be the outcome and the cash dividends and proceeds that go to our token holders are going to be the same irrespective of what's happening in currencies so

13:59you know that that is an important piece um in terms of the additional capital that we're raising uh we have a long and large portfolio um of cases that meet the criteria that i like to invest in um and we are actively diligencing we have a couple of term sheets out now we're hoping and expecting to announce some adding some additional cases to the portfolio in the near future

14:23um that's a great explanation and thank you for that and and we did talk already a little bit about the w liddy token and how the 99 can get access to that i just want to touch back on that one more time and i think the viewers understand that you know if you're winning the company's growing uh that's going to relate to the token as well and and the asset backed equity

14:42token is there any other functionality or uh things that the viewers should know about the the w liddy token and if there's an interaction with the platform or how exactly that functions and has their involvement in in the project i'm so glad you asked that question for me uh i talked earlier about the passion that i have for bringing private equity to

15:05to everyone and you know that is a passion but what really got me um just jumping in this with both feet is part of this project is that the founders and i have agreed that 5 to 10 of every dollar we raise not profit regenerate dollar we raise is going to be put back in the community to find prosecute

15:34and recover money taken by crypto scams and crypto frauds okay so i want to just be clear that if we were able to raise the same amount of money as i had in my last fund billion dollars there would be 50 to 100 million dollars that we would have where our goal is not to make money we're going to get our expenses plus a 10 for our overhead and the remaining 90

15:56will go back to the people who were scammed and it is you want to talk about the time being now the time is now for this crypto fraud and crypto scam is a scourge on this community and right now governments are not incentivized to stand up and do anything about it because crypto is not being regulated individuals and other people either can't afford it where it doesn't make

16:18sense because it's simply not profitable the only way that we are going to stand up is if some organization stands up and says i'm not doing this to make money i'm doing this because it's the right thing to do and with the particular skill set of me and my partners uh we know how to go get people we know how to find them uh and we ultimately know how to bring money back

16:38in and so this you know we believe that this is going to be a a very material part of the offering and i don't know if you saw it or not but you know we've already had our first successful case um with an influencer and friend of mine coach k um who is a relatively known person relatively well-known person in the cryptosphere who we got introduced to because he was

17:01scammed he lost 250 000 uh to a scammer and we were introduced to him and he brought us on the show and within 48 hours we have located a scammer we had located where he was what he had done with the money it's actually worth watching you can go to to his channel or any of the witty capital sites and take a look but this is not words uh words are one

17:24thing actions are another and witty capital is is here to stay with that and these scammers uh a lot of them are going to hear from us really really soon wow that's definitely great to hear david and i i'm so glad that your team is focused on that and giving back because it is a an issue in uh in crypto but i don't think it's um something that you know people should

17:47be afraid of the the no coiners and people who haven't got into the industry yet they hear that this is the main thing it sort of deters them uh from entering the space altogether but as you've clearly shown with the creation of lady capital there's so many advantages uh and benefits of having these cryptocurrencies and introducing it and democratizing access to this capital um

18:09so the benefits definitely outweigh the negatives but i'm so glad that your team is focused on that as well uh so that's really great i'm telling you i i really believe that it is one of the primary things that are holding back this industry um that fear of being scammed and the number of people who have been scammed it's it's poison and and we gotta stand

18:30up uh and say enough's enough you'd be shocked so the people that we're going after generally when we are going after people to repay for wrongs that they've done they do they at least make an attempt to hide themselves and their assets there is no fear among these scammers they are not hiding they are not going anywhere they don't believe anyone is coming it

18:52is it is absolutely unbelievable to me and at the very least hopefully what lady capital will be able to do with the coach k story and the other stuff that's coming uh on the 9th of july we're going to announce the next three cases that we're potentially going after and only w video holders get to decide which of those three cases we ultimately go forward and prosecute

19:14um we're announcing that on july 9th and i i i think that what you're going to see and our the minimum effect that we want to have is to make these people afraid because i believe that somewhere between 25 and 50 of these cases will go away if there's even the smallest bit of fear to get caught there's going to be these real criminals that will that there will be a problem

19:38for a while it's a deep-rooted problem but i think there's a chunk of it that just comes because nobody's afraid of getting caught there's no downside and and we're going to change that definitely that's great to hear and you did mention there you're introducing more cases in early july here uh for the w liddy token holders also to have a say in can we are running short on time

20:00david but i would love to hear the best ways for the viewers to learn more about uh doubly litty token lee capital how to get a part of uh this platform and get involved absolutely so you can come join us on our website buddycapital.com on telegram uh lead capital official on twitter uh at liddy capital it is and if you have been scammed you can

20:28email us at scambuster liddycapital.com and please join us if you've been scammed or if you want to be a part of a community where you can invest the same way the one percent has been able to do it best we really you know actually i think i told you at the beginning um our goal is to get this message out to everybody everybody has the opportunity to not only should have the opportunity

20:54and now does to invest like the one percent but also to be part of a community that protects its own and woody capital is the place for both and and we hope everybody comes and checks us out definitely david and i will leave all of those links in the description box below for the viewers as well all the best with liddy capital and the whole platform moving forward

21:14i'm really excited to see how these initiatives play out and to make the crypto space a safer space as well so thank you so much for that and let's follow up in the near future thanks for having me ashley sure thing you