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I’m thrilled to announce Secfi’s second investment facility from Serengeti Asset Management for $150 million. It follows the first $550 million facility we jointly launched last year.
With this new facility, we can aggressively expand our stock option financing platform for executives and employees at late-stage startups poised for exit.
While exercising early is the ideal situation, we have seen a 5x surge in late-stage employees coming to Secfi to explore financing options before an exit, like an IPO. To better meet their needs and accelerated timelines, we decided to expand our pool of capital.
Our goal is to give everyone — from executive to entry-level employee — the ability to make the most of the options they’ve been granted.
We often work with employees who only think about exercising their stock options when an IPO is imminent because they realize they suddenly have a deadline. They have an urgent, and shortened, time frame to exercise before any blackouts or lockup periods.
Our financing structure limits personal risk and covers the exercise costs (including taxes), allowing startup employees to participate in their employer’s success without risking their savings. Clients make no payments against the financing until an IPO or other liquidity event.
This new capital facility will enable us to help those exercise their options so they can minimize their tax exposure before their company IPOs. We'll continue to tap into the original $550 million facility to help the broader startup community with option exercise and liquidity.
We also have over $13 billion worth of startup stock options registered on our platform.
Our platform provides personalized tools to help startup employees make informed decisions about if, when, and how much it would cost to exercise their stock options. These tools include custom exit gain forecasting and tax modeling across various scenarios.
The unprecedented number of IPOs, SPAC mergers and direct listings in 2020 resulted in life-changing financial windfalls for many private company employees. Still, we estimate that over $4.9 billion was left on the table by those who did not exercise their pre-IPO stock options.
Employees at late-stage companies who wait to exercise face exorbitantly more expensive exercise costs as valuations increase — even up to 5.5x their annual household income for companies valued at more than $10 billion.
Through education, we want to help startup employees understand the benefits of exercising pre-IPO. And with financing, we help them unlock those benefits despite the high investments required upfront.