Option Financing with EquityBee: My Real Experience (And What Every Startup Employee Should Know)

Learn how option financing works, and get a firsthand review of EquityBee—a platform for funding startup employee stock options. Here's what happened when I used it after leaving SimilarWeb.

What Is Option Financing and Why It Matters

Option financing is a solution designed to help startup employees exercise their vested stock options—without paying the often high upfront costs. The cost of exercising (buying) your stock is known as the “Strike price” and is often based on the perceived value of the share at the time of joining the company. The logic being that if you have helped the company grow during your time the company will be worth more when you leave and your shares would have risen in value.

However unless you company is generous and has discounted the options you may have a hefty bill to pay to “buy” the shares when leaving. Typically companies give you 90 days to make that payment.

Instead of dipping into personal savings, employees can use an option financing platform like EquityBee, which provides the capital in exchange for a share of future gains. In a tech ecosystem where liquidity is rare and strike prices are high, option financing has become a game-changer for equity-rich but cash-poor employees.

My EquityBee Story: Using Option Financing After Leaving SimilarWeb

When I left SimilarWeb, I had built up a meaningful stock option position. But like so many employees in late-stage startups, I faced a harsh reality: exercising those options would require more than tens of thousands of dollars upfront—money I didn’t necessarily want to “invest” in a high risk venture.

I also didn't want to walk away from years of work, but I also didn’t want to gamble my personal finances. At the time EquityBee was a new platform and I became one of their earliest customers.

Why I Chose EquityBee

EquityBee offered a simple option financing solution. They reviewed my stock option grant, evaluated the company’s exit potential, and connected me with investors who would front the cash to exercise my options. In exchange, the investors would receive a percentage of any future gains once there was a liquidity event (e.g., IPO or acquisition).

It’s a clean way to avoid losing your stock options simply because you can’t afford to exercise.

The Pros of Using Option Financing like EquityBee

✅ No Out-of-Pocket Cost

The biggest advantage: I didn’t have to invest personal cash to exercise my stock options.

✅ Less Emotional Friction

Leaving a startup is emotionally complex. Option financing allowed me to keep my options without needing to double down financially at a difficult moment.

✅ Early Liquidity and Risk Reduction

Because I had third-party investors involved, I ended up selling my shares as soon as I could. Looking back, that timing worked well. I protected myself from downside while still getting real value.

The Downsides of Option Financing: What I Learned

❌ Reduced Upside

Here’s the trade-off: EquityBee’s investors get a significant portion of any profits. That means I gave up a large chunk of my potential upside—in some cases, the majority. In some cases though if you weren't going to exercise its free money.

❌ Difficult To Understand Exactly What Price You are Recieving

Based on the potential future splits, tax implications etc.. it is difficult to understand exactly what the effective price you are receiving for your equity is and what you will actually make on liquidity. We can help you understand this more effectively.

❌ Investors Get Paid First

In one secondary event, the exit value didn’t exceed the preferred return threshold. So, only the investors were paid—I received nothing, even though I technically held shares.

❌ Legal & Tax Complexity

Option financing deals aren’t simple. I strongly recommend reviewing the terms with a lawyer or tax advisor before signing.

Option Financing Isn’t for Everyone — But It Helped Me

Would I use EquityBee again? Honestly, it depends.

Option financing through EquityBee gave me certainty, liquidity, and a real way to hold on to what I’d earned. But if I had more capital on hand or had been confident in a huge future exit, the cost of giving up upside through option financing might have outweighed the benefits. In addition when it is time to pay back the investors it feels difficult, you are handing over cash that emotionally is yours although technically isn't.

Who Should Consider Option Financing?

Option financing is ideal for you if:

• You’re leaving a startup and have vested stock options
• You can’t afford the exercise cost (or don’t want to take that risk)
• You want to secure your equity without draining savings
• Your company has growth or exit potential

You might avoid it if:

• You can afford to exercise options outright, and the position doesn’t necessarily represent more than 10% of your net wealth at the fair market value.
• You’re confident in a major future return and want 100% of the upside
• You don’t like complex agreements or sharing profits

Will Equitybee finance anyone?

While EquityBee is the most well-known option financing platform, they have become much more selective recently over which companies they will finance and the threshold for a deal they will work on. There are others companies that work in this space including.

• Forge – Combines secondary market access with funding solutions
• EquityZen – Offers liquidity options for private company shareholders
• Secfi, Liquid Stock, and other emerging players – Each with different models. At Aption we are also here to help you understand your options.

I do not recommend just having a side agreement with a friend who is offering to lend you the money these agreements can be complex and have tax implications

Other Ways to Fund and Protect Your Startup Equity

While option financing through platforms like EquityBee is one way to protect your equity position, it’s not the only route. Increasingly, startup employees are turning to alternative funding solutions—including equity-backed loans and equity pooling structures—to unlock value from their private company shares.

With an equity-backed loan, you use the value of your stock as collateral to access cash—without giving up ownership or future upside. This can be a more capital-efficient solution if you're confident in your company's long-term potential and want to maintain full participation in a future exit. It is often only available for stock where there is a secondary market.

Another emerging option is equity pooling, where employees from multiple companies contribute a small portion of their equity into a shared fund. This creates built-in diversification, reducing the risk of betting everything on one company while still allowing upside participation across a group of high-growth startups.

In addition you may wish to buy some the equity and sell it immediately through secondary markets such as Hiive and Forge but this is only for a very select late stage companies.

Each method—be it option financing, loans, or pooling—offers a different balance of risk, liquidity, and potential reward. The right choice depends on your financial situation, risk appetite, and how bullish you are on your company’s exit prospects.

Final Thoughts: Option Financing with Eyes Wide Open

Option financing through EquityBee gave me a path to preserve my equity without taking personal financial risk. I was one of their first customers, and while the experience wasn’t perfect, it worked. I kept my shares and in hindsight, it protected me from potential downside.

But make no mistake: option financing has a cost. You’re selling a piece of your future in exchange for certainty today.

If you're considering using EquityBee, make sure you:

✅ Understand the profit-sharing structure

✅ Know the threshold at which investors get paid

✅ Get legal and tax advice

✅ Check out all of the alternatives to de-risk, including pooling.