As a cornerstone investor in Bright Minds Capital Partners, Exigent’s mission is to change the way legal tech is funded, led and developed.
By David Holme, Exigent’s CEO and Bright Mind’s Chairman
Legal tech has been getting a lot of attention lately: it has made the headlines with stellar injections of cash and private equity finally moving in on the sector. All good news. Except it has also attracted the dark side of today’s investment world: cheap money, ludicrous valuations, and unsustainable growth projections. I would have once just shrugged and said, “it’s where we are in the cycle”, but now that I’m not just an investment expert, but also the founder of a legal and tech services company, I cannot stand on the sidelines and watch this happen without trying to make it right. I’m too passionate about the potential of data in the corporate world to let hasty, soulless investment ruin the biggest shift in business technology since email.
Exigent has been my first business venture after my Private Equity years and it has radically changed my opinion on how investment should be made. To be honest, I was always disenchanted with the way investment managers typically dealt with companies on their portfolios: looking at financial growth only, forgetting about people, long-term sustainability beyond the usual 3-year investment window and with no skills to support all the practical challenges of running a business outside of the bottom line. I wanted to develop those skills myself, saw an opportunity to build a business and went for it. Exigent was born. These 16 years in business have taught me so much. Including that it’s a never-ending learning curve and that your business won’t succeed just by injecting cash into it. So, to see crazy burn rates, businesses that don’t make profits (and are not planning to) being valued at impossibly high prices (Uber, anyone?) and start-ups failing at a 70% rate, I felt something needed to change. With the cash reserves from the business I founded and lead together with Nicola Stott, we are committing to transforming the way legal tech is funded.
Why legal tech
You always start with what you know. Not from what is trendy. That’s rule number one. It just so happens that legal tech is both hip and our craft. Legal tech is in our blood at Exigent, so that’s where we feel we can help the most. But it’s just a starting point: the key for us is data. The challenge is that data is still tangled in a web of insular departments that don’t know how to share it and profit from it. We see the path to liberate data from silos very clearly: it starts from the legal department and spreads across procurement, finance, and the Board. With Bright Minds we want to accelerate this journey towards digitisation, helping post-start-ups to turn the current digital revolution into commercial applications. We know we can help not just with funding, but with the skills that are required to turn an idea into a practical business proposition, with real profit and solid foundations to thrive in the long term.
We’ve done it with Exigent, so we know first-hand what it means to grow a business: it takes old-fashion stamina, lots of selling and marketing, real connection with your team and customers, as well as a dose of brutal honesty to recognise when you’ve made a mistake (because you will make mistakes, that’s guaranteed). When we set up Bright Minds we knew we wanted to do things differently, so we have created an investment paradigm that includes not just cash, but technologists, lawyers, innovation leaders, marketers, and management experts to support our investees in their journey. And there is no ‘best-by’ date: it’s an open-ended fund. This means we don’t need to see profit within the typical 3 years and push for cash-driven, rushed decisions. We want our investees to build strong companies that can wither the imminent burst of the investment bubble (it’s happening, whether you like it or not). As long as there is a plan to bring ROI, we will stick with them and help them achieve it. If it takes 5 or more years, it doesn’t bother us. If the idea is interesting and coupled with a good plan to generate profit, we’re in. It might sound démodé, but that’s how we are going to operate. No amount of Elon Musk’s quotes can change the fact that investment still runs on fundamentals like cash, profit, and people. This is the only rule that has remained unchanged throughout all the bubbles, dot.com included.
We’ve already made a difference
At Exigent, we’re all about being pragmatic. Action. Real results. And so, we got going with our venture capital project and already have two great examples of companies that are changing the legal landscape thanks to our support: LexChain and Muve. LexChain is a cutting-edge blockchain-based immigration compliance automation tool and Muve is a ground-breaking conveyancing business offering a guaranteed time to exchange. They are different in what they do and how they operate, but both use data and the most exciting technology to solve problems, speed up processes and transform segments of the legal industry. Nicola and I are loving getting stuck in helping these two companies grow. We don’t just look from afar; we share with them our complementary skills (Nicola is better than me at marketing and operations!) and are really involved in creating the next steps for success. I’m truly excited about what’s coming next with LexChain and Muve, and with all the future investments we’ll make through Bright Minds. After so many years, it’s like going back home after a long trip: going back to the investment community where I started off professionally but having ‘seen the world’, learnt on my own skin what it means to run a business and now ready to make a difference.
David Holme is the founder of Exigent and chairman of Bright Minds Capital Partners, an open-ended fund investing in disruptive technology companies that are breaking corporate data silos. With an accomplished team of legal technology leaders and investment experts, Bright Minds co-invests alongside select industry partners to maximize sector knowledge. For more information about Bright Minds, please visit: www.brightmindscapitalpartners.com