This article outlines how we assess eligibility for non-recourse financing
With non-recourse financing we must have due diligence to ensure an employee and their company meet certain eligibility requirements.Why Secfi Has Eligibility Criteria
Secfi Financing provides the cash startup employees need to help them exercise stock options, or gain liquidity from stock options they already own. We do this by providing non-recourse financing, which means when we provide you cash for your equity transaction, your personal assets are not at risk.
Because you are not taking on the risk that your company does not have an exit event, and only pay us back if an exit happens, we have a rigorous due diligence process. This process ensures the companies and employees Secfi works with meet the financing eligibility criteria below.
Secfi Financing Eligibility
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Company Stage: The company is on a solid growth and financial trajectory to have an exit event. Generally speaking, that means companies with a reasonable means to exit within the next 5 years. These are general guidelines. We do make exceptions depending on the company and business model.
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Employee options amount: It’s important to us that we do right by our clients. In certain scenarios, it may not be economical for those requesting financing for dollar amounts below a certain threshold. Of course, all situations are unique and we assess all requests on an individual basis.
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Financial regulations: We are a registered broker-dealer with the Financial Industry Regulatory Agency (FINRA) so we must ensure we comply with regulations across the whole financial industry. As with all customers of registered broker-dealers in the industry, individuals must pass regulatory checks to be eligible.
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Country of Residence: We can, and have, worked with non-U.S. residents and citizens, but we may need additional information or clearance from your company prior to engaging in a financing transaction.
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Time: It takes time to complete your account opening, legal checks and the paperwork involved in your financing transaction. If you’ve requested financing from Secfi with a short deadline, we will do our best to meet it. Typically, we can close a financing transaction in 5 business days.
Company Stage: The company is on a solid growth and financial trajectory to have an exit event. Generally speaking, that means companies with a reasonable means to exit within the next 5 years. These are general guidelines. We do make exceptions depending on the company and business model.
Employee options amount: It’s important to us that we do right by our clients. In certain scenarios, it may not be economical for those requesting financing for dollar amounts below a certain threshold. Of course, all situations are unique and we assess all requests on an individual basis.
Financial regulations: We are a registered broker-dealer with the Financial Industry Regulatory Agency (FINRA) so we must ensure we comply with regulations across the whole financial industry. As with all customers of registered broker-dealers in the industry, individuals must pass regulatory checks to be eligible.
Country of Residence: We can, and have, worked with non-U.S. residents and citizens, but we may need additional information or clearance from your company prior to engaging in a financing transaction.
Time: It takes time to complete your account opening, legal checks and the paperwork involved in your financing transaction. If you’ve requested financing from Secfi with a short deadline, we will do our best to meet it. Typically, we can close a financing transaction in 5 business days.
What if Secfi did not approve my financing request?
If we can’t finance your options today, it doesn’t mean we can’t tomorrow! We want to stay in touch and are always monitoring new and growing startups. On occasion, we have approved financing for companies we previously couldn’t. If we’re able to approve financing for you and others from your company in the future, we will reach out. In the meantime, please feel free to keep using our tools and resources to stay informed. Above all, we want our startup peers to be educated and empowered about their equity.
Rare Exceptions
In rare cases, additional company data, such as your company’s valuation figures and revenue, allow us to assess risk on a deeper level and move ahead with your financing. If you’re able to share additional company data, we encourage you to contact your Equity Strategist so they can assess whether this step is right for your scenario.