SAN FRANCISCO--(BUSINESS WIRE)--Secfi, the first pre-wealth management platform helping startups and their employees better manage equity compensation from offer to IPO, today announced they have secured a second investment facility from Serengeti Asset Management for $150 million. The New York-based investment firm, also an early-stage venture investor in Secfi, is expanding its relationship with Secfi given the ongoing success of their first $550 million facility launched in January 2020. The new $150 million facility will expand the platform to stock option financing for executives and employees from late-stage startups poised for exit.
Secfi now works with employees from 80% of all US-based unicorn technology companies and has over $10 billion worth of startup stock options registered on the platform. The platform provides an integrated suite of personalized tools to help startup employees make informed decisions about if, when, and how much it would cost to exercise their stock options. These tools include custom exit payout forecasting and tax modeling across various scenarios. Critically, through its partnership with Serengeti, Secfi provides non-recourse financing enabling employees to finance the exercise of their stock options without paying out of pocket.
"We’re thrilled to partner once again with Serengeti," said Frederik Mijnhardt, CEO of Secfi. “This new capital is earmarked for very late-stage private companies on the path to exit. While exercising early is the ideal situation, we have seen a 5x surge of late-stage employees coming to Secfi to explore financing options before IPO and decided to expand our pool of capital to better meet their needs and accelerated timelines.”
“This has been a tremendous partnership for both of us,” said Jody LaNasa, Managing Partner and Founder at Serengeti. “Through our relationship with Secfi, we’ve built a broad, diverse, and growing portfolio of private companies. We’ve gained exposure to many of the fast-growing unicorns like DoorDash and Snowflake, all while providing liquidity to hundreds of employees that we believe are transforming the world. We look forward to growing our relationship with Secfi to reach an even broader array of individuals and companies.” A Partner and the President of Serengeti, Leslie D. Biddle, adds that “the recent increase in SPAC activity has underscored the need for employees to early exercise and we are excited to further scale the platform to meet this growing demand.”
The unprecedented number of IPOs, SPAC mergers, and direct listings in 2020 resulted in life-changing financial windfalls for many private company employees, yet, it is estimated that over $4.9 billion was left on the table by those who did not exercise their pre-IPO stock options. In particular, employees at late-stage companies who wait to exercise face exorbitantly more expensive exercise costs as valuations increase - even up to 5.5x their annual household income for companies valued at more than $10 billion. Secfi educates its clients by showing them the benefits of exercising pre- IPO.
While Secfi and Serengeti continue to help the broader startup community with option exercise and financings through their original $550 million facility, the new $150 million facility addresses the specific capital needs and short time frame of late-stage pre-IPO employees, enabling those employees to optimize the value of their stock options before exit.
Secfi’s financing structure limits personal risk and covers the exercise costs and taxes, allowing clients to participate in their employer’s success without risking their savings. Clients make no payments against the financing until an IPO or other liquidity event.
Serengeti is a value-driven investment firm that selects, underwrites, and invests in leading private technology companies through these stock financings.
Secfi has helped employees from some of 2020’s biggest IPOs and SPAC exits, including Airbnb, DoorDash, Palantir and Snowflake, to unlock liquidity from their equity and improve their financial outcomes. The company provides simple technology solutions to educate shareholders on the complex world of equity compensation and how to build wealth for the future.
Secfi provides equity planning tools that are designed to help private company employees and shareholders make better financial decisions for their equity from offer to IPO. Secfi provides financing to help employees exercise options or unlock liquidity for important financial goals. Their team of Equity Strategists are available to assist every step of the way. Secfi brings clarity, peace of mind and thoughtful planning to thousands of startup employees. Visit: www.secfi.com
About Serengeti Asset Management
Founded in 2007, Serengeti Asset Management focuses on niche credit opportunities defined by their size, complexity and labor intensiveness. It invests in performing debt and high-yielding opportunities. Serengeti also provides institutions and private company executives with sophisticated solutions to funding challenges through its dedicated financing platforms. Serengeti manages capital for institutional investors including pensions, endowments, and large family offices. Visit: www.serengeti-am.com