“How do I sell my startup stock options?”

So you've got stock options and are interested in selling some. Smart.

Many employees need or want to "take some money off the table" throughout their tenure at a startup. Whether you have bills to pay, you want to lock in some gains, or you just want to diversify where your money is located, there's no shame in selling your stock. In fact, it could be quite smart.

The difficult question is "how do I sell?". That's where we come in.

Vested helps you navigate the world of secondary stock sales. There are plenty investors looking to buy stock from employees, but it can be difficult to find them.

You don't have to sell your stock.

Instead of selling, you may be able to get a risk-free loan to exercise your stock. This will cover your exercise cost and your taxes. You only pay back when your company goes public or is acquired -- and only if you make money.

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Who buys my stock?

We estimate that there is over $30 billion of capital looking to purchase employees shares at US backed startups. Companies are staying private longer, and there are limited shares available, so outside investores look to buy shares from employees in order to invest.

Most of these investors are looking to buy stock in companies which are Series C or later, and usually have strong revenue (more than $30M per year).

To find these investors, you can use a broker (or marketplace) or you can communicate directly with the buyer. Many of these investors are funds (much like normal venture-capital funds), but there are plenty of potential buyers who can be found via a marketplace.

Tip:

Choosing a partner to sell with isn’t just about finding the highest price per share. Also important:

  1. Has the buyer or marketplace transacted with your company before? If so, there may be a higher likelihood of transaction success for you.
  2. Does the buyer have capacity to buy all of the shares you want to sell?
  3. Are you able to meet the minimum size requirement for this buyer?

Here are some marketplaces and funds where you can sell your shares:

EquityZen

Marketplace

SharesPost

Marketplace

MicroVentures

Marketplace

Forge

Marketplace

RainMaker

Marketplace

Should I sell my options?

That's really up to you. Having stock in your startup is not very diversified: your salary, and your stock are all tied up in one company.

Many times there is a short window where there is interest in buying private company stock options, usually when there is some recent positive press or a fear-of-missing-out (FOMO) mentality from investors. When the opportunity arises, you should be equipped with the tools to make the best decision.

With Vested, you can list your shares discretely and confidentially. We'll notify you when there's interest and you'll be on your way.

Note: Some companies do not allow you to sell your stock before IPO or acquisition. In those cases, it's likely better to pursue a risk-free loan for your shares.

“If I sell some stock, will my company think less of me?”

Employees who sell pre-IPO often fear that employers will think they're “selling out” on the vision of the company.

Not to worry. Companies understand that personal financial situations are just that: personal. With the average company taking close to ten years to go public, employers recognize that having substantial value fully tied up in the company is less than ideal. Employees need to buy houses, pay for education, handle expenses, etc. Life and financial needs march on independent of a company’s IPO plans.

A company can’t advise you to sell your vested shares, so the availability of secondary stock sales isn’t usually broadcast around a company. But just because the company doesn’t talk about them, doesn’t mean they don’t happen.

Vested helps you sell your stock options.

We'll help you offer your stock for sale safely and discretely. Simply type where you work to get started.

Vested, Inc. ("Vested"), a Securities and Exchange Commission (SEC) registered investment adviser (RIA), offers a software-based financial advice engine that delivers automated financial planning tools to help users achieve better outcomes. Registration as an RIA does not imply a certain level of skill or training and does not constitute an endorsement of the firm by the Commission. A copy of Vested’s current written disclosure brochure filed with the SEC which discusses among other things, Vested’s business practices, services and fees, is available here.

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