Stock option marketplace startup EquityB has raised $ 20 million in a Series A round of funding.
Group 11 led the financing, including participation from Oren Zeev Ventures, Battery Ventures and ICON Continuity Fund. It has exceeded the company’s total amount of $ 28 million since the beginning of 2018.
Oren Barzillai, CEO and co-founder of EquityB, says his company’s mission is to help startup employees make sense of their stock options as well as provide them with funds.
“I’ve seen many of my friends and co-workers negotiating for a $ 500 salary increase, but the startup completely disregards their stock option package due to a lack of knowledge being opaque to the entire field of stock options,” Barzillai , Which founded Tappingo, was acquired by Tha Grube in 2018 for $ 150 million. “As a founder I saw members of my team who did not help the company participate in our success because they left ahead of time and did not give up their stock options.”
The way it works is quite straightforward. EquityB provides capital to startup employees so that they can purchase stock options. Employees receive money to cover the cost of exercising their stock options and taxes. Investors who have helped provide funding can do so by getting returns, or a portion of the profits, if there is “a liquidity event”. EquityB earns money by charging the investor an upfront fee on the day of investment, as well as interest on a successful exit or IPO.
Barzillai said that many employees do not realize that they have 90 days to make a choice before leaving the company. And even if they do, they may not always have the money to exercise. This is where EquityB wants to help.
The company was originally founded in Israel before launching in the US market, and in February 2020 moved its headquarters to Silicon Valley. Since then, it has funded “hundreds” of employees from several companies, including Airbnb, Palantir, DoorDash and Unity, with capital provided. Family offices, funds and high-net individuals. Its investor community is made up of 8,000 funds, family offices and high net worth individuals.
2020 was a good year for equities, according to Barzillai, who says it grew by more than 560% to fund employee stock options. It saw a 360% increase in the number of individual employees funded through its platform.
Looking ahead, the 33-man company’s plan is to use the money to hire and expand product offerings.
Dovey Frances, the founder of Partner of 11, said it doubled on equity after backing the company in its $ 6.6 million funding round in February 2020 as it “fit into the right product market” and triple-digit growth of the company. Described as.
WeWork co-founder Adam Newman led the company’s $ 1.5 million seed round in September of 2018.