LM

LEX Markets Financial Model

Three vertically-integrated pillars:

1. Supply - Licensed investment bankers take individual CRE buildings public via a securitization template (minority equity stake sold as non-voting permanent capital; sponsor retains control).
2. Liquidity - Proprietary SEC-registered Alternative Trading System (ATS) powered by Nasdaq matching engine; T+2 settlement via DTCC/CNS; accessible to market makers and any brokerage.
3. Demand - FINRA-member broker-dealer app (iOS); integrated with Apex Clearing; open to non-accredited investors; shares tradeable via LEX app or existing brokerage accounts / RIAs.

Investor experience: buy from $250/share, earn quarterly distributions from rent, sell freely on the ATS without holding periods.

• Potential distribution partner platforms: 100+ million investors
• Total AUM on those platforms: $20+ trillion
• No formal TAM/SAM/SOM breakdown presented in the deck.
• Competitive positioning framed qualitatively: LEX is the "only option for single asset, freely tradable shares of real estate" - intersection of single-asset and publicly tradable, distinct from traded REITs, non-traded REITs, Fundrise, YieldStreet, Cadre, CrowdStreet, etc.

Not explicitly stated in the deck. Implied revenue streams (inferred from business model description):

• Issuance / underwriting fees charged to CRE sponsors when LEX takes a building public (investment banking function)
• Transaction / trading fees on secondary market activity via the ATS
• Potential spread / maker-taker fees from market makers operating on the ATS
• Share price at IPO: $250/share; illustrative trading prices shown at ~$248–$254/share

• 12,000+ registered users (LIVE)
• 1,600+ brokerage accounts opened
• 1 asset successfully taken public in 2021 (first CRE IPO on the platform)
• ATS live: continuously matching orders 9:30–4:00 on all business days
• Assets in illustrative user portfolio shown: 3 properties, $78.1M asset value
• Illustrative share prices: GWYGU Gateway Garage ~$252.09/share, PKPLZ 12 Park Plaza ~$248.12/share

Competitive landscape:

• Positioned at unique intersection of "single asset" + "publicly tradable" - no direct competitor occupies this space.
• Non-traded REITs, Fundrise: not single-asset or not tradable.
• Traded REITs: portfolio-based, not single-asset.
• YieldStreet, Cadre, CrowdStreet, PeerStreet, RoofStock, RealCrowd, Realty Mogul, Building Bits: single-asset but not freely tradable.

Moat sources:

• Regulatory licenses already obtained: SEC-registered ATS, FINRA-member broker-dealer, Reg A securities
• Nasdaq technology partnership (ATS matching engine)
• Apex Clearing integration
• Moody's Analytics property data
• DTCC/CNS eligibility and CUSIP securities - enables distribution through any brokerage
• First-mover: first CRE asset securitized and listed in 2021

• Partners listed: Nasdaq (ATS/UMS), Moody's Analytics (property analytics), Apex Clearing (clearing & custodian)
• Investors: Greycroft, Thor Equities, Raj Capital, Gaingels, Modern Venture Partners, Kawawa
• No team slide, no individual names, no funding amount, no round size, no use of funds disclosed.

• Archetype + why: Marketplace GMV / take-rate model with a dual-revenue layer (issuance fees + ATS trading revenue). LEX is a two-sided marketplace where gross property value listed (deal flow) and secondary trading volume are the primary top-line drivers. This resembles an exchange/marketplace P&L more than a SaaS or DTC model.

• Forecast horizon & granularity: 5-year annual model (2022–2026), with monthly granularity for Year 1 to capture ramp. Nov 2021 deck → Company is just post-launch.

• Key drivers & assumptions:

*Supply side (deal flow)*

• Number of CRE assets taken public per year
• Average property equity tranche size ($M per deal)
• Issuance fee as % of equity raised

*Secondary market (trading revenue)*

• Total shares outstanding (cumulative deal flow × avg shares per deal)
• Daily trading volume as % of shares outstanding (annualized turnover)
• ATS fee per share traded
• Share price: ~$250 at issuance

*Demand side*

• Registered users
• Brokerage account conversion rate (accounts / users)
• Average invested capital per active account

*Cost structure*

• Personnel (IB team, compliance, tech)
• Compliance / regulatory maintenance
• Nasdaq ATS technology licensing
• Apex Clearing per-account or per-trade fees

• Scenarios (Base / Bull / Bear - which variables flex):
• Bear: 1–2 deals/year, low user conversion, thin trading volume, issuance fee compression
• Base: 4–6 deals/year by Y2, 13% account conversion maintained, 30% annual turnover
• Bull: 8–12 deals/year by Y3, 20%+ conversion, higher turnover as market makers add liquidity, 3rd-party brokerage distribution channels open up

• Required sheets / outputs:

1. Deal Flow & Issuance Revenue (supply pipeline: deals × avg equity tranche × fee %)
2. ATS Trading Revenue (shares outstanding × turnover × fee/share)
3. User & Account Funnel (users → accounts → invested AUM)
4. Opex Build (headcount by function, tech/compliance costs)
5. P&L Summary (revenue, gross profit, EBITDA)
6. Cash / Runway (burn rate, implied funding need)
7. Scenario toggle (Bear / Base / Bull)