LOS ANGELES–(BUSINESS WIRE)–159 U.S. Initial Public Offerings were reported in 2019, ushering companies such as Lyft, Slack, and Uber into the public domain. Despite an initial slow down in IPOs in Q1 of 2020 due to Covid-19, there has been well over 100 initial public offerings completed through the close of Q2. This resurgence has increased the need for equity-financing companies, like Quid, who provide equity-backed loans to shareholders of private, high-growth technology companies. Additional information on Quid can be found at www.getquid.com.
Quid, a dedicated fund of venture capital group Troy Capital Partners which is backed by an affiliate of funds managed by Oaktree Capital Management, L.P., identifies high-growth startups on an IPO trajectory. In turn, Quid offers capital to respective shareholders, providing individuals upfront cash against the value of their company shares. Quid launched in 2018 amongst an emerging sector of loan products that are secured by stockholder equity & has now worked with shareholders across 20 different companies & finalized terms on over 85% of their first fund. In contrast with traditional loans secured by personal assets, Quid’s loans are collateralized by a shareholder’s private stock.
Quid has a highly selective underwriting process & only works with shareholders from what it believes are the highest growth companies in the world. They encourage shareholders to hold onto their shares & take out loans, rather than sell & forgo all future upside. This decision can be an extremely valuable one, as many recent US tech IPOs have dramatically appreciated from their initial IPO prices.
- Lemonade ($LMND) – Jul 2nd, 2020 : The company IPOed at $1.6b & is now worth $4.5b. (181% appreciation)
- ZoomInfo ($ZI) – Jun 3rd, 2020: The company IPOed at $8.2b & is now worth $16.2b. (98% appreciation)
- OneMedical ($ONEM) – Jan 30th, 2020: The company IPOed at $1.7b & is now worth $4.6b. (171% appreciation)
- Vroom ($VRM) – Jun 8th, 2020: The company IPOed at $2.5b & is now worth $5.7b. (128% appreciation)
Quid has recently focused its attention on helping shareholders from companies like Palantir, Stripe and others, who Quid believes are next up to IPO. The company predominantly works with option holders who are looking for proceeds for option exercise. Companies like Palantir, founded in 2003, who have been around for almost two decades have many option holders who are now coming up on their 10-year exercise cliffs. Because these shareholders have been at their respective companies since the early years, the spread between their strike prices & 409a valuations have become large, thus resulting in tax bills that are sometimes larger than $10 million per shareholder. Quid has been working with companies & shareholders alike to provide these option holders with the ability to pay large tax bills & exercise fees without having to sell a single share. This allows these shareholders to unlock the value of their hard earned equity & still take part in the potential IPO price up-swing.
A dedicated fund at Troy Capital Partners, Quid offers a new kind of loan on pre-IPO equity. There is generally no personal liability on the loan and the loan is designed to be fully compliant with most company policies, allowing employees and shareholders to enjoy cash today without any out of pocket expenses. The loan is repaid when the company goes public or has another liquidity event, and the employees keep most of the upside. Quid is managed by Troy Capital Partners and backed by Oaktree Capital. Learn more at www.getquid.com.
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