Turning Expiring Options Into Venture Exposure [Vested’s Dave Thornton] | #597

What It Covers

Vested provides capital to startup employees to exercise expiring stock options in exchange for equity exposure, creating diversified venture portfolios with 200+ positions across top-tier private companies using proprietary employee behavior data.

Key Questions Answered

• •Stock Option Abandonment: Approximately 70% of startup employees forfeit vested stock options worth hundreds of billions because they lack cash to exercise within the 90-day post-termination window, creating systematic opportunity for third-party capital providers.
• •Purchase Discount Strategy: Vested acquires shares at third-party board-approved fair market value which includes a discount for lack of marketability, typically taking 25-50% of employee shares depending on strike price delta to fund the exercise.
• •Proprietary Selection Model: The platform uses employee behavioral signals like early exercise patterns, share counter-offers, and voluntary forfeiture decisions combined with quota-carrying sales rep data to predict company performance and select top 20% of venture-backed firms.
• •Dual Liquidity Paths: Portfolio exits occur through traditional corporate events like IPOs and acquisitions plus individual-level liquidity when employees access company-sponsored tenders or secondary markets, with acquisitions representing 75% of exits and individual sales 25%.