Hello all,<p>I am working at a tech startup and have some portion of vested options that belong to me. I recently have some financial difficulties and would like to know if I can trade my vested option in a secondary market or something to some angel investors who are also interested in my current company. The extra bit of cash might help me in the next few months and would like to know how I can establish that. Any advice?
Probably not. Your employee stock agreement probably requires company approval for transfers, and unless you're at a large company that already has a liquid market for its equity, that approval will not be granted.
Before you exercise, make sure you are familiar with the Alternative Minimal Tax and how exercising Stock Options affect it. See <a href="https://www.wework.com/magazine/knowledge/startup-equity-understand-amt-exercising-options/" rel="nofollow">https://www.wework.com/magazine/knowledge/startup-equity-und...</a> and <a href="https://gigaom.com/2011/06/05/5-mistakes-you-cant-afford-to-make-with-stock-options/" rel="nofollow">https://gigaom.com/2011/06/05/5-mistakes-you-cant-afford-to-...</a> (especially the David Weekly at the bottom). Some people went bankrupt for that. Also check the rules on ISO (I supposed you have ISO options).<p>Then I think the best you can do is to sell the right to own the stocks when you will be able to sell them according to your stock plan. In practice you cannot sell the stock now but you can have a contract with a person that you will sell them as soon as you can. Or something like that...<p>On how to find somebody willing to buy them, I am not sure. Common stocks are considered almost worthless by a lot of investors. There are also some information about preference in round of funding etc, that a sophisticated investor would like to know but it is not always public knowledge outside of the board.<p>Before Facebook IPO I know SecondMarket was the place. I am actually curious about the options here.
Consider talking to the company about it. If they're doing well, (and aren't concerned you might leave) they might be interested in buying the options back.
Read your purchase agreement, employment contract, articles of incorporation, buy/sell agreement etc. It is common for the circumstances for the transfer of shares to be established to handle this sort of situation because founders don't want just anyone owning shares. If something is unclear, consult an attorney.<p>One common way of handling these situations is for the founders or the company or other employees to purchase the shares. A loan with the shares as collateral is another possibility.<p>Keep in mind that selling shares may be viewed as a lack of faith in the company [likewise if the founders are not interested in reacquiring your shares.<p>Good luck.
While you likely can't transfer ownership of your shares, you can take a loan out on the sell value of those shares at some predetermined later date. The legalities are somewhat sticky, but it is possible.