I
I

inci

AE

Valued Contributor
Fire Starter
Contributor
+1

Locked Up Equity: Need Help

I used to work at a startup that changed the by laws on exercising options and private sale. 

At the strike prices I have I'm already in the money but would like to unload them. 

Does anyone have any contacts/companies that would write a "forward contract" to take these off my hands?

More detail:
I have 10,000 option in a Series D Silicon Valley company exercisable at $5.68 a pop. I have till November to exercise. 

Said shares are currently valued at $24 each. So I am already $18.32 positive on each share. 

I have the funds to exercise but am trying to find an underwriter to write a forward contract. i.e. a company that will take the shares off my hands right after any liquidity event. I don't want to have stagnant capital sitting around. I'm happy to take a haircut on the $24.

Not a "US person" per IRS definitions. 
📉 Equity
⚖️ Legal
💴 Money Management
6

13 comments

Sort by:
SADNESSLieutenant
Politicker
1
Officer of ♥️
Im not sure what the question is
CuriousFox
WR Officer
2
🦊
I'm afraid I'm not of any help either.
inci
Valued Contributor
1
AE
Added some detail. Hope it helps.
SADNESSLieutenant
Politicker
1
Officer of ♥️
Maybe father @poweredbycaffeine knows? This is out of my league.
SADNESSLieutenant
Politicker
0
Officer of ♥️
Thanks, it does
poweredbycaffeine
WR Lieutenant
2
☕️
Noooooot a chance that I know how to perform this witchcraft.
Pachacuti
Politicker
1
They call me Daddy, Sales Daddy
I am guessing you NEED the money now?  

That said, I know what you probably have in mind and its not the smartest financial thing to do.  You take a BIG hit because basically you're asking someone else to take all the risk.  You'd be lucky to get $0.10 on the dollar.  

Also, you need to check on the legality of selling your options early.  It may not be allowed.
inci
Valued Contributor
1
AE
Added detail. Hope it helps.
I_LOVE_WINE
Executive
1
Enterprise AE
this is a very unique scenario that will most likely require a specialized firm to potentially help you out.  You might have more flexibility or options if you exercise the options, I haven't ran across anyone that does forward contracts but they might be out there.  I would check LinkedIn, I have had some advisors try to buy out some private company equity from me before so there might be some folks on there. Good luck
FinanceEngineer
Politicker
0
Sr Director, sales and partnerships
Check out equity bee or other services like them.
inci
Valued Contributor
0
AE
Afraid they don’t do forward contracts.
JuiceBox
Opinionated
0
Director
Working at startups myself and being granted equity, it's going to be a challenge for anyone to exercise this sort of contract.  It's 100% risk on the party "buying" your shares off of you.  You may be able to get someone to give you a fraction of your buying value, due to this and them being willing to gamble.

A lot of stock option agreements allow for selling to a third party, but some do not.  I am not a lawyer and have only ever kept my equity myself in my ventures, never tried to sell before the period.

Sorry if this doesn't help much, reach out to a professional tax attorney and see if they have experience or can refer you to someone who does.  Also if its only November, down give up the 180k, seems crazy.  Ill ask around and see if I can find you a contact and edit if I can

To be clear, you want 56800 in cash now, in exchange for 240k in return in november?
finboi
Notorious Answer
0
Fi-nance
Late to the post here but you are talking wayyyyy under the minimum needed to do anything like what you are describing. Even trying to straight sell your shares with a secondary offering is going to be at a rough discount.

Related posts

2

Help Me Negotiate Severance

Advice
🙏
🚀
🤘
9
26
Members only

I got fired from a SaaS role and I need help evaluating my options

Question
🚀
💺
🗣
27
Bravado is a community of trusted sales professionals endorsed by their customers.
Apple Store logo
Products
The War Room Jobs Salary Guide Tech Sales U
Company
About Us How It Works Blog Bug Bounty
Contact
Press Careers
© 2024 Bravado Inc. All rights reserved.
Privacy Policy Legal and Privacy Center Sales Jobs
If you are hired as a contract sales rep by a Bravado customer, we may ask you to prove access to the employee email account provided to you by that customer. This data will be shared with customers to track your sales productivity; customers can use this data to confirm you meet the minimum activity requirements to pay out your ramp stipend and commission.