EquityBee, a stock options market start-up, has raised $ 20 million in a Series A funding round.
Group 11 led the funding, which also included participation from Oren Zeev Ventures, Battery Ventures and ICON Continuity Fund. That brings the company’s total raised to over $ 28 million since its inception in 2018.
Oren Barzilai, CEO and co-founder of EquityBee, said his company’s mission is to help startup employees understand the meaning of their stock options, as well as provide them with funds to be able to buy them.
“I’ve seen a lot of my friends and colleagues negotiate a $ 500 raise in salary, but completely ignore their stock option package for lack of knowledge due to the opacity of the whole field. start-up stock options, ”said Barzilai, who also founded Tapingo, which was acquired by Grubhub in 2018 for $ 150 million. “As a founder, I saw the members of my team who helped build the company not participate in our success because they left prematurely and did not exercise their stock options. .
The way it works is pretty straightforward. EquityBee provides capital to start-up employees so that they can purchase stock options. Employees receive money to cover the cost of exercising their stock options and taxes. The investors who helped provide the funding so that they could do so get a return, or a share of the profits, if there is a “liquidity event”. EquityBee makes money by charging an upfront fee to the investor on the day of the investment, as well as any interest earned on a successful exit or IPO.
Barzilai said many employees don’t realize they have around 90 days to exercise their options before they expire once they leave the company. And even if they do, they don’t always have the means to exercise them. This is where EquityBee wants to help.
The company was originally founded in Israel before entering the US market, and moved its headquarters to Silicon Valley in February 2020. Since then, it has funded employees of “hundreds” of companies, including Airbnb, Palantir, DoorDash and Unity, with capital provided by family offices, funds and high-net individuals. Its community of investors is made up of 8,000 funds, family offices and high net worth individuals.
2020 has been a good year for EquityBee, according to Barzilai, who claims to have increased the amount it raised by more than 560% to fund employee stock options. It also saw a 360% increase in the number of individual employees funded through its platform.
Going forward, the 33-person company plans to use the money to hire and expand its product offerings.
Dovi Frances, founding partner of Group 11, said she doubled EquityBee after backing the company through its $ 6.6 million fundraising round in February 2020 because she was impressed with what she described as “the ‘perfect product market fit’ and triple-digit growth of the company.
WeWork co-founder Adam Neumann led the company’s $ 1.5 million funding round in September 2018.