What to Consider
Employees with options become shareholders, aligning their interests with the company and its shareholders.
Requires employees to sell their shares in order to exercise options and/or obtain liquidity.
Liquid’s Solution is Employee Friendly
Optimizing your employees’ tax positions and providing liquidity without discount sales, demonstrates thought leadership, enhances morale and controls the cap table.
Tenders May Leave Employees Disenfranchised
Selling at a discount and/or subsequent financings at even higher values, disenfranchise employees.
Gain Diversity & Maintain Ownership & Upside
Liquid’s solution provides liquidity and the shares remain in the hands of your employees.
Gain Diversity but Lose Ownership & Upside
Tenders provide cash for employees to diversify their equity exposure, but at the expense of giving up their upside.
Net Worth is Maximized if the Company Trades Higher
Employees are typically better off with the Liquid Solution if the stock price stays static or increases in the future.
Net Worth is Maximized if the Company Trades Down
Employees are better off selling in a Tender Offer if the stock price declines in the future.
How the Liquid Solution Works
- Underwrites your company
- Establishes group pricing based on classes of stock and option grants
- Coordinates employee and shareholder education with tax and legal experts
- Provides capital directly to your employees and shareholders
- Manages the Plan and integrates with your stock administrator
- Determines who participates
- Decides the terms of the offering: option exercise, shareholder liquidity, or a combination
- Establishes the funding criteria and limitations
- Offers Liquid Share Ownership Plan to employees and shareholders
Liquidity for Option Exercise
Maximize the value of your employees’ vested options
Liquid’s Option Exercise Solution vs Waiting Until Exit
Jill has 200,000 vested options, granted with a $1.00 strike price. She can exercise her options today at $2.00. Jill can finance her option exercise today with Liquid Stock or net exercise upon an IPO. Jill does better financing with Liquid Stock if her shares are worth $3.30 or more post-IPO.
Employees are share buyersrather than share sellers
Optimize taxes, lower risk andmaximize net worth
Company receivesnon-dilutive financing
Liquidity for Shareholders
Provide shareholders liquidity without forcing them to sell
Liquidity for Shareholders vs Tender Offer or Secondary Sale
James owns 150,000 shares and is seeking $500,000. He bought his shares for $2 and they are currently worth $10. James can sell 66,667 shares in a Tender Offer to net $500,000 or work with Liquid Stock. Financing with Liquid Stock is better for James if his shares are worth $13.30 or more upon the expiration of the underwriters’ lock-up post IPO.
Receive taxoptimized liquidity
Diversify while maintainingownership and upside
Does not changethe cap table
Why Partner With Liquid Stock
From hiring to retention to morale, Liquid Stock can help support an “Employee First” culture by maximizing the value of your employees’ hard earned equity. Liquid can help your company shift the paradigm and turn option holders into share buyers, aligning your employees with your company.