Ask HN: What do you think about stock option loan programs?

1 point

14 years ago

I am an early employee at a late-stage, privately-owned start-up. I am considering leaving the company, but I have a lot of stock options, most of which are vested, and it would cost me an amount in the low six figures to exercise them and pay the necessary taxes.

The stock options are potentially very valuable, but I am not in a position to take on that kind of risk.

I recently read about this new program from SharesPost that provides loans to start-up employees to exercise their options:

http://www.forbes.com/sites/tomiogeron/2012/10/15/sharespost-launches-lending-for-startup-stock-options/

It all makes sense, and is the best answer I have ever seen to the "I am leaving my start-up, should I exercise my options?" question that pops up on this site from time to time. Honestly, it sounds too good to be true. I am looking for the catch.

If you have experience with or insight into the above program or others like it, I would love to hear from you. Thank you!