A guide to help you choose the right type of financing for your stock options
It’s all about your risk versus reward. Here are some factors to consider before you decide to submit a request for a Secfi Financing or a Secondary Sale.Secfi offers different ways to extract value from your equity stock options. Let’s break those financing and loan options down to make the choice easier.
Goal: What would you like to accomplish with these funds?
Financing offers a way to either exercise your stock options or get liquidity to tap into the value of your previously exercised shares – without selling them.
A secondary sale also allows you to get liquidity from your equity, but you will no longer retain ownership of them
Risk: Secfi Financing and Secondary Sales carry different risks and rewards
When we extend Secfi Financing funds to you, you don’t pay anything out of pocket until or if your company goes public. If your company never has a successful exit event, like an IPO, your personal assets are not on the line. Secfi assumes the risk that your equity value may be equal to or lesser than your financed amount.
Secfi Secondary Sales requires there to be a market with someone who wants to purchase your shares. This can take time. There is also the chance that the market is willing to pay more or less for your share, it really just depends.
Repayment: How you’ll repay Secfi (or not)
With Secfi Financing, you only pay us back if your company goes public or exits another way.
With Secfi Secondary Sales you'll pay a fee for us to broker the transaction.Since you're selling your shares there is no further repayment.
Rates and fees: Your structure for repayment
Secfi Financing costs nothing upfront and you repay the financed amount if your company has an exit, plus Secfi fees.
Secfi Secondary Sale you'll pay a fee for us to broker the transaction upon completion of a successful sale.
Qualification criteria: What Secfi needs to get you approved for funding
With Secfi Financing, your qualification is based on:
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your company’s growth
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your company’s exit potential (potential to go public or exit another way)
- your company’s stock
- your company’s growth
- your company’s exit potential (potential to go public or exit another way)
- your company’s stock
With Secfi Secondary Sale, your qualification is based on:
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your total equity value
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your company and if there is a market for it
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your company allows the sale/transfer of shares
Taxes: Improving your outlook with Secfi
With Secfi Financing, you may be able to write off some of the fees Secfi charges when you do your taxes.
With Secfi Secondary Sale, you will need to pay taxes on the proceeds from the sale.
FAQ
Can I submit a request for both Secfi Financing and a Secfi Secondary Sale?
You can. If that seems like the best option for you, go for it. We’ll assess your financial situation and an Equity Strategist will let you know if you qualify for Secfi Financing, a Secfi Secondary Sale, or both.
If I’m still not sure or have questions, can I talk to someone at Secfi?
Yes, in fact, a call with one of our Equity Strategists is built into the process when you apply for financing. Equity is complex - so you’ll get the full rundown of whether these products are right for you on the call before moving forward with a proposal and contract.