Quid Capital Group Raises $320 Million To Offer Liquidity Benefits For Startup Employees

By Noah Long ● November 21, 2020
  • Quid Capital Group, a company that offers liquidity benefits to startup employees, announced it has raised $320 million for its second fund

Quid Capital Group, a company that offers liquidity benefits to startup employees, announced it has raised $320 million for its second fund, according to BizJournals. The startup employees are essentially given cash with their equity as collateral. 

The $320 million was provided by Oaktree Capital Management, Davidson Kempner Capital Management, and a strategic investor group including board members at late-stage tech companies.

Quid launched its first fund in late 2017. And since then, the company loaned over $100 million to shareholders at about two dozen high-growth companies such as Uber, Lyft, Unity, and Palantir. Through this second fund, the company will focus on company-wide programs.

“Quid’s goal is to identify a select group of high-growth, late-stage companies and provide their shareholders with the most efficient liquidity possible,” said said Quid CEO Josh Berman in a statement via BizJournals. “The Quid solution seeks to optimize tax, option exercise and liquidity planning for our customers. We have seen regular, programmatic, shareholder liquidity become a retention requirement for any top of the line late-stage company.”

Prior to launching Quid, Berman was the co-founder and COO of MySpace between 2003 and 2008. He also co-founded BeachMint and The Lucky Group.

Quid says it will lend startup employees with up to 35% of their stock’s value. And employees can keep most of their shares with no fees taken out of pocket during the time of the loan. Then the loan gets repaid when the company goes public or if there is another liquidity event such as an acquisition. In exchange for the loan, Quid charges an annual interest rate of 7% along with a small percentage of shares.

“The Quid team has done an incredible job of solving the illiquidity issues of late-stage private tech markets,” added Brian Laibow, Co-Head of North America & Managing Director of Opportunities Funds at Oaktree. “We look forward to partnering with them on future funds starting with Quid 2.”