The EquityBee Investor Community gets a share in potential future gains of leading private startup companies by providing startup builders the capital they need to exercise their stock options.
0 - 1,000%
Asset Class Return•1Y
The EquityBee Investor Community gets a share in potential future gains of leading private startup companies by providing startup builders the capital they need to exercise their stock options. Investors in the EquityBee Community compete for the opportunity to participate in funding these options. Upon an exit event, the startup employee and the investors who funded the options will share the gains.
Things to Know
You make money on
Term of investment
Invest in startups beyond their seed stage
Discounted prices based on valuations set in the past
Invest in companies that have raised money from top VCs and angel investors and are not looking to raise money from the crowd, or companies that aren’t even raising at all
See inside MoneyMade’s 6-figure multi-asset portfolio
How you make money
You make money through when an action event occurs, such as the company getting acquired or the company going public. You do not have control of when that happens, but you are provided discounted investments due to the shares being employee held. Since employees are asking for exercise cost funding for options that have already vested and since options take at least one year to vest, the investment is made a price that was set in the past (typically 1-5 years before the investment is made). If the company is growing, that means your entry point may be lower than the current price. Employee stock options are options for common shares, which are priced at a significant discount vs. preferred shares external investors typically buy.
How EquityBee makes money
Investors pay a 5% upfront fee of the price of your investment plus 5% carry on any profits they made in excess of their original investment amount.
Is it safe?
EquityBee executes SOFAs (Simple Options Financing Agreements), which contain substantial risk and may result in the complete loss of capital to the investor. The SOFAs are speculative, illiquid, as they are not publicly traded and there is no secondary market. Securities offered through North Capital Private Securities Corporation, member FINRA/SIPC.
How You’re Taxed
Profits earned from investing in startups are taxed like stocks. Investors are subject to short-term capital gains when selling investments held for less than a year, which are taxed at ordinary income tax rates. Long-term capital gains are applicable when investments are held for a year or more with tax rates ranging from 0% to 20%, depending on your total taxable income.
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