When to fund your option execise with ESO Fund
Exercising stock options at startups often comes with a large cash cost, plus potential tax exposure. Many employees walk away from valuable equity because they can’t afford to exercise. Once you decide to exercise, ESO Fund can help cover those costs, with our fully non-recourse Option Exercise Funding.
Common situations include:
- Leaving your company and facing a 90-day expiration window.
- Exercise before leaving your company so you're not forced to hold onto your equity as Golden Handcuffs.
- Starting the clock on long-term capital gains.
- Exercising before a company fundraise increases the FMV.
- Capturing benefits while QSBS eligible.
How ESO Fund Helps
ESO Fund covers the full cost of exercising your options, including potential tax obligations, in exchange for a portion of shares if the company exits successfully.
- Non-recourse: If your company never IPOs or exits, you owe nothing
- Ownership retained: Your shares remain in your name; we don’t take transfers.
- Personal Partnership: Work with an experienced ESO Fund Partner who knows your situation, not just a portal.
- Algined incentives: No interest, no fees. We only get paid if your company exits successfully, so our goals are fully aligned with yours.
Why ESO Fund vs Alternatives
When employees face an option exercise, the challenge isn’t just paying the cost, it’s taking on all the risk. ESO Fund provides a simpler path: we cover the upfront costs, and if your company doesn’t exit, you owe us nothing. Compared to loans or secondary sales, our approach helps you unlock equity without interest, fees, or forced transfers.
There are a few ways employees fund option exercises. Here’s how ESO Fund compares:
- Traditional Loans: Require collateral, charge interest, and are fully-recourse if the company doesn't exit.
- Secondary Sales: Often require selling 100% of your equity. Minimums and transfers are common.
- Other Option Exercise Firms: Charge interest, add fees, and often run through marketplaces and portals.
- Exercise Yourself: Keep 100% of the upside, but also take on 100% of the risk.
- ESO Fund: Non-recourse, no interest, no fees, no transfers. Shared upside, reduced risk.
"Friendly people who worked VERY quickly to make a deal in the last days of a possible stock exercise."
Engineering Team
Series D Company, Silicon Valley
How Pricing Works
ESO Fund’s funding is non-recourse, meaning if your company doesn’t reach liquidity, you owe nothing. We structure each offer based on your company, your equity, and the funding amount.
Instead of charging interest or fees, we share in a percentage of your equity plus our money back only if there’s a successful exit.
Simple 3-Step Process
- Intro Call with an ESO Partner (15 mins).
- Receive a personalized non-recourse funding offer.
- Close and fund.
FAQ
Do I have to fund all my options with ESO, or just some?
You can choose to fund all or part of your option exercise, whatever fits your situation best.
Do I need company approval to get funding?
No. Unlike a secondary sale, our process does not require board or company approval because your shares remain in your name.
What happens if I leave my company before funding is complete?
No problem. As long as your options are still exercisable, we can provide funding within your window.
Can ESO also cover AMT or tax obligations tied to the exercise?
Yes. In most cases, we fund both the strike price and estimated tax obligations. We consider any exercise related taxes to be part of the overall cost of exericse.
What information do I need to provide to start?
Just your company name and equity details. We handle most of the research and due diligence ourselves. I
Who will I work with during the process?
Every client is paired with an ESO Fund Partner who guides you from intro call to closing, not just an automated portal.
