3 ms·
Ask HN: Who offers loans on startup equity?
Hi all,
I'm looking to take out a $250k loan that uses some startup equity I own as collateral (the FMV of that equity comes in at ~$650k).
For what it's worth, the company is 4-5 years old and isn't a brand name like, e.g., Uber. That's to say I'd expect industry knowledge would be required to fully appreciate the value of the equity (e.g. investor names, usage metrics, etc).
Who offers loans of this kind?
I don't imagine I can, e.g., walk into my local Chase branch and strike up a good loan for this, right?
Thanks!
- mtmail 5y agoIs the loan for you personally or for the company? There are a couple of services that specifically give loans to startups based on their recurring revenue (usually need access e.g. to Stripe). https://venbridge.com/growth-capital/software-as-a-service-revenue-financing/ https://venbridge.com/growth-capital/software-as-a-service-r... https://flowcap.com/revenue-based-financing/ https://flowcap.com/revenue-based-financing/
- equityloanq 5y agoThe loan is for me, personally.
- mtmail 5y agohttps://www.bitsfordigits.com/ https://www.bitsfordigits.com/ might be another option. Not a loan though.
- smt88 5y agoIs the equity transferrable? Can it be "repossessed" by a bank if you default? The legal structure of the startup is important here and may be preventative.
- tluyben2 5y agoThis is really important; collateral means nothing if lender cannot act. I am not from the US but at least I had partners do this in the past a few times; the lender wanted 3x the amount in equity (shares can drop especially in startups), the equity had to be transferable and the guys had to personally sign and if married, their partners too (shares can become $0, especially in startups). The interest rate was quite good, but one of my friends is still paying it off over a decade later which got him into all kinds of issues with his relationship and family.
- forgotmysn 5y agounless you work at a unicorn and are fully vested, i would imagine you would find this very difficult.
- toomuchtodo 5y agohttps://getquid.com/ https://getquid.com/