ESO Fund offers non-recourse financing to employees for exercising stock options and unlocking liquidity from RSUs. We cover exercise costs and tax liabilities, allowing employees to access their equity value without personal financial risk.
Funding
Funding not disclosed
Founders
Product
Problem
Employees in private companies often face significant out-of-pocket expenses and financial risk when exercising stock options, which can expire if not exercised within a limited timeframe. This situation can prevent individuals from realizing the potential value of their equity or from making career changes due to the capital required. Additionally, Restricted Stock Units (RSUs) can expire worthless if a liquidity event like an IPO or acquisition does not occur within their grant period.
Solution
ESO Fund provides non-recourse financing solutions for employees to exercise stock options and unlock liquidity from their equity, including RSUs. The company covers the exercise costs and potential tax liabilities, such as Alternative Minimum Tax (AMT), allowing employees to retain upside potential without personal financial risk. This enables individuals to access their wealth for personal goals, diversify their investment portfolios, or make career transitions while maintaining ownership of their shares. ESO Fund also offers liquidity against RSU grants that may expire if a liquidity event is not achieved within the grant's timeframe.
Target Audience
The primary customers are employees of private, venture-backed companies who hold stock options or RSUs and require capital to exercise them or seek liquidity against their equity.
Features
- Non-recourse financing for stock option exercise, covering strike price and potential tax liabilities like AMT.
- Liquidity solutions for Restricted Stock Units (RSUs) that may expire before a liquidity event.
- Funding process designed for speed, with offers typically provided within hours and funding in as little as 24 hours.
- No requirement for company or board approval for employee financing.
- Retains employee ownership and control of shares throughout the financing process; shares are not transferred to a trust.
- Risk absorption model where ESO Fund assumes the loss if the company's stock value declines or RSU grants expire worthless.
- Financing agreements structured with a percentage of the stock and return of investment, without interest, closing fees, or hidden charges.
- Support for employees across various stages of company development, from pre-IPO to public company transitions.