When a private company transitions to a public company through the IPO process any existing company shareholders or options are subject to a Market Stand Off provision; commonly referred to as an IPO lockup period. The lockup period prevents insider shareholders such as VC investors, founders, and employees from selling their shares on the public markets before a predefined time period explicitly expressed in the company option plan. The average lockup period is 180 days, but can stretch longer.
In that time, a lot can happen to your hard earned shares or options as the public market the company and reacts to macroeconomic events out of your control. Additionally, the company's IPO doesn't always align with your career plans. If you're facing an option exercise deadline and don't want to lock up your own cash for a number of months, ESO Fund can help with an IPO lockup loan. Our lockup loan program is a simple loan with a fixed interest rate based on your specific timeline.
Whether you need an advance to cover the final month of lockup or all 6, ESO Fund helps you unlock your cash sooner in case you have time-sensitive expenses such as tax bills, closing a real estate purchase, or simply avoiding the expiration of a grant that falls into the lockup window.
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Here’s how our process works:
1. Intro Call
• Introduce yourself and your situation, and feel free to ask as many questions about ESO as you would like.
2. Get an Offer
• We will conduct due diligence and get back to you with our decision.
• Once we extend an offer and the terms are accepted, we run a simple credit check and then we can close. If you are local to the Bay Area, join us in our wonderful San Mateo office. If not, no worries! We can close remotely via Zoom or Google Hangouts.
It’s that easy.
Don’t let your options expire worthlessly. The ESO Fund allows you to capture upside and keep your cash free for other needs.