For many unicorn option and share holders, Collective can be the best way to monetize their holdings while reducing their risk of holding a single stock
Free your wealth
The new smarter way to monetize your unicorn stock and options
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About Collective
At Collective Liquidity, we are dedicated to providing unicorn shareholders with the financial tools they need to effectively manage their wealth.
Over the past decade, our team has launched some of the private market’s largest, most innovative platforms. Now, we are leveraging everything we learned along the way to deliver unicorn employees and investors with dramatically better access to liquidity and risk management solutions – solutions that enable them to finally and fully unlock the value they helped create.
We invite you to meet our team and learn how each of us is committed to Freeing Your Wealth!
Compared to a stock sale, Collective Liquidity is fast, easy and can deliver more after-tax cash
The Collective Exchange Fund and Exchange Loans
The Collective Exchange Fund enables you to reduce the risk of holding a single stock by exchanging your stock for a partnership interest of equal value in our diversified portfolio of other leading unicorns like yours.
Exchanges into the fund are tax-free and, after one year, you can redeem your partnership interest for cash at the end of each quarter.
With an Exchange Loan, you can also borrow against your partnership interest on a non-recourse, tax-free basis to generate immediate cash whenever you need to. Because Exchange Loans are tax-free and non-recourse to the borrower, they provide many shareholders with more cash after-tax than they’d receive from a stock sale.
Shareholders of companies like these can gain fast, easy diversification and liquidity by exchanging into the Collective Exchange Fund.
How It Works
1
Exchange your shares for a partnership interest of equal value in the Collective Exchange Fund, our diversified portfolio of leading unicorns like yours.
2
Then, with a non-recourse Exchange Loan, receive an immediate, tax-free loan equal up to 60% of the value of your partnership interest at any time.
3
When the time is right for you, redeem your partnership interest to pay off your loan and keep any leftover value - earning you even more in a tax efficient manner.
01
If you hold $100,000 worth of shares in one of the companies in our Exchange Fund target portfolio, you can exchange your shares for a $100,000 partnership interest in the fund. This diversifies your holdings and reduces your risk.
02
In our example, you can immediately borrow $60,000 (less interest) with an Exchange Loan. And because you don’t sell your partnership interest for the money - you just borrowed against it - your partnership interest continues to appreciate in value over time.
03
Finally, if you decide to pay off your loan when your partnership interest is worth $125,000, you would keep the original $60,000 (less interest), plus retain an Exchange Fund limited partnership worth $65,000 - that you can redeem for additional cash at the end of any quarter. This is a multiple of the after-tax liquidity you might have expected from a stock sale.
Compare the after-tax liquidity from an Exchange and Exchange Loan to a stock sale
I have
Exchange Loan
- Gross Loan Proceeds
- $ -
- Cash received now after taxes, finance charges, and options exercise price *
- $ -
- Potential after-tax fund distribution in 7 years¹
- $ -
- Total potential after-tax proceeds
- $ -
Brokered Stock Sale
- Gross Sales Proceeds
- $ -
- Cash received now after taxes, commissions, and options exercise price
- $ -
- Potential after-tax fund distribution in 7 years
- Not applicable
- Total potential after-tax proceeds
- $ -
¹ See the underlying assumptions and analysis for this estimate
* The value of the shares you entered is below the required minimum transaction value to be eligible for an Exchange Loan
* The value of the shares you entered is below the required minimum transaction value to be eligible for an Exchange Loan
Benefits
Combining an exchange into Collective’s Exchange Fund with a non-recourse Exchange Loan can reduce your risk of holding a single stock, deliver dramatically more after-tax liquidity and is faster than a stock sale
Reduce Risk
The Collective Exchange Fund lets you reduce your risk with a tax-free exchange of shares in a single company for an interest in a diversified portfolio of leading unicorns. The fund is designed to provide passive investment returns representative of the unicorn asset category.
More Liquidity
An Exchange Loan can potentially deliver more immediate after-tax liquidity than a stock sale, and then potentially deliver even greater liquidity later when you redeem your fund interest to repay the loan and keep whatever is leftover.
Faster and easier
Compared to a stock sale which requires you to connect with a broker, find a buyer, negotiate price, and draft transaction documents, an Exchange Loan is fast and easy. The online application process takes just five minutes to complete.
Still have questions?
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