Unlocking Startup Equity: Quid’s $320M Fund Empowers Employees
For startup employees holding equity, the promise of a lucrative exit often comes with a catch: waiting years for an IPO or acquisition to cash in. Enter Quid, a financial innovator providing liquidity solutions by offering loans backed by equity collateral. The company just announced a $320 million fund to expand its mission.
Bridging the Liquidity Gap
Startup equity can be a golden handcuff—valuable but illiquid. While tech giants like Uber and Airbnb eventually deliver massive payouts, employees often face years of waiting. Quid’s solution? Loans of up to 35% of the equity’s current value, giving employees access to cash without selling their shares.
Key Features of Quid’s Model:
- Flat 7% Annual Fee: Transparent pricing with no hidden costs.
- No Personal Guarantee: Loans are secured solely by equity.
- Tax Support: Quid covers tax liabilities tied to the loan.
- Downside Protection: If a company fails (à la WeWork), Quid absorbs the loss.
Strategic Expansion and Backing
Quid plans to partner with 30 high-growth startups nearing IPO, allocating up to $30 million per company. The fund is backed by heavyweight investors like Oaktree Capital and Davidson Kempner, along with unnamed tech executives—hinting at potential collaborations with late-stage unicorns.
The Founders’ Vision
Founded within Troy Capital—known for early bets on Uber and SpaceX—Quid is led by managing partners Josh Berman (MySpace co-founder) and Anthony Tucker. Their 2018 pilot fund deployed $200 million across 24 companies, including Unity, Palantir, and Lyft. The spinout from Troy earlier this year marked Quid’s formal independence.
Why This Matters Now
The venture landscape has changed:
- Prolonged Private Phases: With abundant VC funding, startups delay IPOs, leaving employees cash-strapped.
- Secondary Market Limits: Not all companies offer share buybacks, and processes can drag.
- Life Milestones: Home purchases, education, or reinvesting in the company often demand liquidity.
Selective but Scalable
Quid’s model isn’t for everyone. It rigorously vets companies based on growth metrics and valuations, working only with top-tier startups. Yet, as the unicorn herd grows, so does Quid’s addressable market.
A Word of Caution
While Quid’s approach fills a critical gap, the risks mirror broader market volatility. As Tucker notes, success hinges on balancing capital deployment with disciplined underwriting. For employees, it’s a calculated trade-off: immediate cash versus potential long-term gains.
Bottom Line: Quid’s latest fund signals confidence in the pre-IPO lending space—a niche poised to grow as startups rewrite the IPO playbook.
