Stock options aren’t a sure thing. For every private company that goes public or is sold for high price, many more are liquidated and the people who own common stock or exercised their options lose 100% of their investment.
Now there is a choice that allows option holders to obtain upside with minimal risk—obtain an advance from the ESO Fund and use that money to exercise your options. No payments are due unless and until there is a liquidity event involving the company that issued the shares, such as a sale or IPO. At that time, ESO receives an agreed upon payment and the owner of the stock and ESO share the upside of the liquidity event. ESO can also advance funds for potential tax liabilities associated with the stock, such as Alternative Minimum Tax (AMT). Even if you can afford to exercise your options and pay your AMT, by leveraging ESO's funding you can diversify your risk by investing in other assets instead. The combination of equity in your startup company purchased with ESO's help and the assets you invest in directly can represent a safer and larger portfolio than if you merely invested in a single company.
An advance from ESO to exercise your options can provide you with significant upside with minimal risk. If you’d like to know more about how ESO can help your financial situation, please contact us at the ESO Fund.