ESO Fund vs. SecFi: Which Option Exercise Solution Is Right for You?

If you're a startup employee looking to exercise your stock options but need financial support, you've likely come across ESO Fund and SecFi. Both companies offer non-recourse funding, meaning you don’t owe anything if your stock never becomes valuable. However, the terms, structure, and overall client experience differ significantly.

Before making a decision, it's important to understand how these two options compare: especially when it comes to cost, transparency, and long-term financial impact.

How ESO Fund and SecFi Help Employees Exercise Stock Options

Both ESO Fund and SecFi provide non-recourse funding, which means:

✅ You receive funding to cover your stock option exercise cost and associated taxes.

✅ No personal liability. If your stock ends up worthless, you owe nothing.

✅ You retain ownership of your shares and potential upside.

While the core offering is similar, the terms and structure of the funding vary significantly.

Key Differences Between ESO Fund and SecFi

No Interest vs. Accruing Costs

• ESO Fund: ESO Fund does not charge interest on the funding provided. Instead, we take a portion of your equity in addition to a return of the original funding amount, aligning our interests with yours.
• SecFi: SecFi charges an interest-based fee that accrues over time, meaning the longer it takes for your company to exit, the more you owe. This interest is charged on top of an equity sharing percentage.

Why it matters: If your company takes years to exit, compounding interest can dramatically increase the cost of your option exercise funding.

Transparent Terms vs. Additional Fees

• ESO Fund: No hidden fees, no maintenance costs, and no unexpected charges. You know upfront exactly what portion of your future gains will go to ESO Fund. ESO Fund simply gets a percentage of the shares plus a return of the original investment.
• SecFi: SecFi’s funding services involve several fees:
  
  • Platform Fee: A 5% fee based on the funding amount.
  • Advance Fee: A interest-like fee that compounds quarterly.
  • Equity Fee: Like ESO Fund, SecFi takes a portion of the shares’ value at exit.‍
  • Trust Setup and Maintenance Fees: Some clients have reported monthly administrative or trust maintenance fees, which can add to the total cost over time.

Why it matters: Unexpected ongoing fees can eat into your returns and add financial uncertainty. These fees don’t always make SecFi the more expensive option, but their complexity can impact your total cost. It's important to factor them into your decision.

Personal Partnerships vs. Automated Platform

• ESO Fund: We prioritize personalized service, working directly with employees to tailor funding to their needs. Our team takes the time to answer questions, clarify the tradeoffs, and help you make the best choice for your financial future. Beyond funding, we stay on as partners through an exit: helping you navigate secondary sales and supporting you through an IPO or M&A.
• SecFi: SecFi leans toward a self-serve experience, with tools, calculators, and wealth management portals. Employees are routed through a platform, not directly connected to a funding partner. SecFi also offers wealth management services, which may be a focus depending on the client.

Why it matters: If you want a dedicated partner who knows your situation and works with you throughout the process, ESO Fund offers a more hands-on approach. Check out some of our reviews!

Choosing the Right Partner

Both ESO Fund and SecFi help startup employees exercise their stock options. However, the differences in cost structure and process can have a major impact on your financial outcome.

The Bottom Line: Keep More of Your Equity with ESO Fund

If you're looking for a straightforward, risk-free way to exercise your stock options, ESO Fund offers a transparent, interest-free solution with no hidden fees.

Get in touch today to explore how ESO Fund can help you exercise your stock options.