What to Consider
Not All Solutions Are Created Equal
As you explore liquidity options, ask tough questions. Getting this wrong has consequences.
Liquidity Without the Risk
Non-recourse agreement. We don’t require a personal guarantee.
Deal Directly with Decision Makers
We manage a dedicated pool of capital. Once we agree to work together, there’s no delay.
Our structure is not attached to a date, it’s attached to a future liquidity event. We don’t get paid until your client gets paid.
The shares remains with the shareholder. Period.
How Liquid Stock Works
Your client receives cash, the Advance Amount, in a non taxable event. This cash can be used to exercise options, pay taxes and/or achieve liquidity from an existing share position.
The Investment Return accrues annually, but nothing is owed until your client achieves liquidity.
Company IPOs or sells. Your client repays Liquid the Advance Amount, Investment Return, and Stock Fee.
Your client keeps the remaining shares and realizes a tax benefit from Liquid Stock’s contract.
What You Need to Know
Total dollar amount that Liquid Stock provides your client for option exercise financing or liquidity.
Functions much like a non-cash interest rate. The investment return accrues to the balance of the advance amount and compounds annually.
A fixed percentage of the shares to be transferred to Liquid Stock on the Repayment Date.
All contracts with Liquid Stock are settled at liquidity event, IPO or M&A transaction. There is no fixed term, your client can settle at any time prior to IPO.
In the event your shares become worthless, Liquid Stock has no recourse to any of your assets. The only assets pledges in a Liquid Stock contract are your shares.
Liquidity for Option Exercise
Maximize the value of your clients’ 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 work with Liquid to exercise today or net exercise upon an IPO. Jill does better using Liquid’s Solution if her shares are worth $3.30 or more post-IPO.
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 of financing. 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 use Liquid’s Solution. Liquid’s Solution is better for James if his shares are worth $13.30 or more upon the expiration of the underwriters’ lock-up post IPO.