Twelve Reddit employees faced a familiar startup decision.They had stock options. They believed in their company. But exercising meant coming up with substantial capital - It was six figures for a few of them - The challenge wasn’t just affording the cost. It was deciding whether the risk made sense.
Even those with savings weren’t sure they wanted to invest that much into a single, illiquid asset. What if Reddit never went public? What if the value declined?
For many startup employees, that discomfort becomes a deal-breaker.
But there is another path.
According to Carta, over 55% of startup employees lose their vested stock options — either because they can’t afford the cost or aren’t comfortable taking the risk.
And the cost is real: U.S. startup employees face an average of ~$140,000 in combined exercise and tax obligations (Equitybee internal data).
This group of Reddit employees didn’t want to walk away from the equity they earned - but they also didn’t have the funding or weren’t ready to put that kind of capital on the line.
Between 2021 and 2023, these 12 Reddit employees used Equitybee’s platform to secure over $1.3 million in funding to exercise their stock options and cover related tax obligations.
In return for the funding, once or if a liquidity event (such as an IPO or acquisition) occurs, the employees agree to:
These terms are defined up front and only apply if the company exits. If there's no liquidity event, the employee owes nothing.
the deal terms vary for each employee based on:
1 Investor demand for that specific company
2 The market conditions at the time
3 The employee’s strike price
The more attractive the opportunity to the community of investors (e.g. low strike price, strong market interest), the better the terms the employee may receive funding at.
When Reddit went public in March 2024, the outcome was clear:
This case study is a success story - but it’s still the exception since more than 55% US employee stock options go unexercised. Most employees facing the same scenario end up letting their options expire due to:
High exercise + tax costs
Uncertainty about the company’s future
Tight 90-day windows post-termination
Lack of awareness that alternatives funding options exist
This group of Reddit Employees acted early, explored their options, and found a structure that worked for them.
Each of the 12 Reddit employee offers came with individualized terms - including exercise amount, investor share percentage, and accruing interest - based on:
1 Their option strike price
2 Share value at time of offer
3 Time horizon until expected exit
This tailored approach ensured every participant had funding terms suited to their situation.
Equity can be a powerful form of compensation - but only if employees can access it. These 12 Reddit employees didn’t just believe in their company.
They found a path that aligned with their risk tolerance and financial position - and it paid off.
Join 2,750+ employees who turned vested options into real ownership
