SAN FRANCISCO--(BUSINESS WIRE)--SharesPost, a leading liquidity provider to the Private Technology Growth asset category, today launched a new program that provides immediate liquidity for holders of private company shares and stock options.
SharesPost’s private stock loan program enables shareholders to borrow against their stock to generate liquidity and allows option holders to finance the exercise of their options. Rather than selling shares to gain liquidity or using personal capital to exercise options, SharesPost will structure a loan customized to each individual and allow them to retain the potential upside in their holdings.
The loan program is intended to help shareholders generate liquidity to finance a home, education or other needs. For option holders, the program enables individuals to realize the full benefits of stock ownership, while helping avoid the often significant tax consequences associated with highly appreciated shares.
“SharesPost’s private stock loan program broadens our capabilities to provide liquidity to the Private Tech Growth asset class,” said Founder and CEO Greg Brogger. “In 2009, we created a secondary market to allow shareholders to sell their stock. Today, we’re launching a loan program that offers another way to generate liquidity. By offering a suite of solutions, SharesPost is providing greater choice for our clients.”
How It Works
A private stock loan is a non-recourse loan collateralized by private company shares. Because the loans are non-recourse, borrowers are not required to put personal assets at risk. Repayment of loan principal and accrued interest is due at loan settlement. SharesPost has assembled a network of institutional lenders to fund the loans.
For option holders in particular, purchasing shares outright can start the long-term capital gains holding period and potentially reduce taxes. Option exercise also benefits departing employees by allowing them to hold on to their hard-earned equity.
“It’s critical for option holders to have a proactive plan to maximize the value of their stock options,” said Managing Director Robert Pitti, head of the SharesPost’s private stock loan program. “If option holders plan early, they can significantly increase the after-tax value of their holdings following an IPO or company sale. A key decision is whether to exercise options a year or more in advance of an anticipated liquidity event. SharesPost can help option holders and shareholders decide the best course of action.”
To determine whether a private stock loan is appropriate, click here.
About SharesPost, Inc.
SharesPost is an SEC-registered broker-dealer, investment advisor and an approved Alternative Trading System. SharesPost helped launch the private tech growth market in 2009 and has built one of the leading platforms for secondary transactions and Initial Coin Offerings pursuant to Reg. D. SharesPost provides the private tech asset category with a suite of trading and lending solutions to facilitate shareholder and option holder liquidity. With nearly $3 billion in secondary market transactions for more than 190 leading technology companies, SharesPost provides the trading, research and online tools to transact in the private market with confidence. For information, visit sharespost.com.
Cautionary Note Regarding Forward-Looking Statements
The matters described herein contain forward-looking statements. These statements include, but are not limited to, statements about research on late-stage, venture-backed companies. We caution that these statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements involve a number of risks, uncertainties or other factors beyond SharesPost’s control. These factors include, but are not limited to, factors detailed in the white paper. We undertake no obligation to release any revisions to any forward-looking statements.