For executives and employees finding partial liquidity for stock-based compensation
can be like finding safe refuge in a storm
provides executives and employees of private companies with a viable option to liquidate a portion or all of their stock options and underlying shares issued by current and former employers. We enable them to gain liquidity, on their timetable, by providing a fair value and accelerating the ability to monetize gains. We can work with exercised or unexercised stock options and common or preferred stock. We do not generally require information rights above what is attached to the securities. We work collaboratively with venture capitalists, officers and directors to provide an efficient and rapid evaluation and transaction process. All information will be managed in strict confidence.

Executives and employees confront numerous cash liquidity issues when managing stock options, all of which impact estate planning, tax planning, family planning and often day-to-day personal spending budgets.  BrownSavano combines financial resources with estate planning expertise to help executives:
  • Find cash to exercise and pay taxes on valuable stock options before expiration or forfeiture;
  • Liquidate sweat equity that is tied up in a previous company;
  • Access cash to support a major purchase or other high-priority family need;
  • Diversify gains when a majority of net worth is concentrated in a single illiquid asset;
  • Lock in long-term capital gains treatment on vested options;
  • Overcome cash pressures related to lock-ups or outstanding shareholder loans in advance of an IPO;
  • Cash out equity even if an organization’s merger, acquisition or IPO has been postponed; and
  • Obtain cash to participate in a rights offering being presented by VC shareholders; or alternatively, monetize the inherent value of the option or right to participate (BrownSavano has paid cash in exchange for an executive’s right to participate in a VC round).

Venture Capitalists, Officers, and Directors

With roots in venture capital, the BrownSavano team has extensive VC relationships and success acting as a complementary and valuable investment partner. Our focus is on purchasing minority interests in venture-backed companies directly from individual shareholders, including founders, former and current executives, angel investors and corporate strategic investors. Our due diligence and negotiating process is non-disruptive to management and the board. Generally, we do not seek board participation or special rights. 

As a shareholder, our interests are highly aligned with the company’s management and board.  We reserve fresh capital for future company needs and are often in a position to quickly lead and price a new round of equity funding.  With decades of investment experience across hundreds of companies and transactions, we have deep domain expertise and a Rolodex of contacts that we make available to management and the board on an as-needed basis. 

We welcome co-investments from existing VC shareholders and management regardless of whether or not first refusal rights exist for stock that we have negotiated to purchase. In many cases, we can act as an independent, third party pricing agent that facilitates a secondary purchase by existing VCs, as we negotiate to buy a portion of the shares being offered and existing VC shareholders buy the rest on the same terms.

While not our primary focus, we will entertain purchasing stock directly from VCs under the following scenarios:
  • A fund is over-allocated to a single investment;
  • A fund is out-of-sync with an early or late-stage investor regarding exit timing or risk profile;
  • A fund needs a third party transaction in a partial sale to justify a markup on an existing investment;
  • An old fund needs to free up cash reserves for other portfolio requirements, management fees or LP distributions;
  • A VC needs cash to avoid a dilutive round; and
  • A fund is nearing the end of its life and several investments remain to be liquidated.
 Prospective Sellers
Picture of Bond Street Wharf

If you are a shareholder in a dynamic private company, contact us to learn more about BrownSavano.
 
 
 
 
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