Options can be intimidating. Spending your savings to buy into a private company with no promise of a return on that investment is scary. Many recently departed startup employees share these feelings, often deciding to let their options lapse because they can’t justify the risk or cost of self-financing.
We've come across this situation countless times and we get it: stock options are risky, expensive, time sensitive, and the timing is never ideal. Exercising them may put strain on your other major life expenses. Recognizing a need for a solution to help employees – those who deserve to keep what they’ve earned but find themselves in one (or many) of these situations, we started Employee Capital Partners. Born out of a need, we are funded by investors who are equally passionate about helping employees convert their options into real equity: a true and earned ownership stake in the company they helped to build.
If this sounds like you, we’d love to chat.
ECP provides funding to people like you to help cover the costs associated with exercising stock options. Whether you’re a current or former employee at a high-quality venture backed company, we want you to benefit from the gains on your stock options, without having to invest your own money. If you are on the fence, here are 7 reasons you should partner with ECP:
1. Tax Savings
By exercising your stock options, you officially start the clock for the IRS long-term capital gains holding period.
What does that mean?
Once you hold your common shares for at least one year, you qualify for long-term capital gains tax treatment. Depending on your situation, this could lead to substantial tax savings in the long run.
2. Downside Protection
When you exercise your options, you become a common shareholder in your company. Unfortunately, we have seen too many situations where common shareholders have lost their entire investment post-exercise. By having ECP cover your exercise costs, we dramatically reduce your personal financial risk.
We assume the downside risk for you and participate with you on the upside. This is why we say that your success is our success.
3. Certainty in a Time of Uncertainty
Unfortunately, we are already seeing companies lay off employees and revise their guidance due to the COVID-19 pandemic.
Many things remain unclear, but by having us cover your exercise costs, you are given the security to keep or spend your hard-earned money where needed on the things most important to you and your family.
Don’t choose. You have the opportunity to get the best of both worlds: money in your pockets for protection through the unknown, and the ability to participate in the possible upside of your equity investment.
4. Opportunity Cost
Every dollar spent in stock options is a dollar that can’t be spent elsewhere.
Would you rather spend your hard-earned savings on an investment in a private company with no promise of a return, or something different?
Maybe you want a more diverse portfolio, a down payment on your first home, or want to cover your child’s college tuition? Do you dream of an investment property or a much-deserved vacation? The list for where else you could spend your investment capital goes on.
Keep your cash and let us handle it.
We know you’re busy, and option exercise deadlines are strict. That is why we’ve designed our process to be remarkably short and simple; often, we can get you the money you need in under a week.
6. Partnership Runs Deep
When making any decisions that involve large sums of money, we understand that trust is paramount. To bridge that gap, we’ve aligned your interests with ours. We built our solution in a way that ensures you are a true partner throughout this process.
How did we align our interests?
Simple. We don’t make money unless you make money.
We have worked with 100+ current and former startup employees across 40+ companies – all of them in your same situation - many with very little knowledge of how options work. Since we are a selective operation, we can offer unparalleled responsiveness. We work with you one-on-one to break down the complexities of options. – You have gained a partner through ECP – you won’t be juggled around through multiple associates.
7. Transparent, Straightforward Financing Solution
When ECP was founded 3 years ago, we sought to differentiate ourselves through our financing solution. Our cash advance can be used however best suits you. Whether it’s to exercise your vested stock options, get ahead and early exercise your unvested options, or to fund your previously exercised stock options, we have a solution for you.
We are proud that our solution disrupts the industry standard: we have no monthly interest payments, collateral requirements, or hidden fees. That’s not what partners do.
Still not convinced? See if we can change your mind by by submitting an inquiry here.