Woe to the “paper millionaire” without “pre-wealth” management. After losing his “entire equity stake” because of an unexpected tax payment, former startup employee Wouter Witvoet decided to found his own company, Secfi. The financial services firm is designed to help startup employees exercise stock options and wait until an IPO or exit to make payments, according to a TechCrunch report.
Secfi raised $7 million in venture funding from investors and is now partnered with New York hedge fund Serengeti Asset Management. That partnership enabled a $550 million arrangement to facilitate financing. Others in the space include Section Partners; Quid, the loan arm of Troy Capital Group; and ESO Fund. The latter has been providing financing since 2012.
Secfi is just one alternative to the “Quora rabbit holes” that startup employees are encountering, noted the article. “As more money gets directed from these behemoth funds toward ‘pre-wealth’ financial services, you can expect to see more startups like Secfi popping up,” it concludes. For its part, Secfi published plans to offer trust and estate planning, particularly tax-efficient gifting. It did not provide a date for when that service might launch.