What to Consider

Secondary Tenders

Complete Alignment

Employees with options become shareholders, aligning their interests with the company and its shareholders.

Least Alignment

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

Company Underwriting
Pricing Established
Employee Education
Decision Support Model
Employees Sign, Receive Funding
Quarterly Communication
Liquidity Event

Liquid Stock

  • 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

The Company

  • 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.

Key Benefits

Employees are share buyers rather than share sellers

Optimize taxes, lower risk and maximize net worth

Company receives non-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.

Key Benefits

Receive tax optimized liquidity

Diversify while maintaining ownership and upside

Does not change the 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.

Get Cash Lower Taxes Minimize Risk

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