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A loan against crypto assets is a valuable financial product to a lot of individuals across demographics. Today, we’re honing in in on one group that we know will find crypto loans useful: employees and founders of crypto native companies.
Startup equity struggles
At Arch, we know what it’s like to have equity in privately held startups. It represents a meaningful portion of your net worth, but it’s frustrating when financial services companies don’t see it that way. It’s one asset class that has been highly illiquid and disadvantaged for years. Typically, these startup employees either have to sell their shares in secondary markets (often at large discounts) or wait until their company gets acquired or goes public. If the company does go public, the employee has the ability to not only sell the shares at market value, but also borrow against the shares. The benefit of borrowing here is that the employee does not face any capital gains tax and continues to benefit from any increase in the company’s share price.
Why this works for crypto
For individuals that work at crypto native companies, DeFi protocols and other such organizations, the “equity” compensation often comes in the form of tokens. These tokens are often liquid from the early stages of the company, although the level of liquidity typically depends on the value of the protocol/company being built. These individuals find themselves in similar positions to employees that work at startups that just went public.
In these situations, individuals may find it beneficial to borrow against these vested tokens in the event they need cash to make other investments or cover larger expenses, as they will get to benefit from token price increases and avoid any taxation that comes from selling.
If you are an individual that works at a crypto native company like Uniswap, Aave, Solana, Polygon or any similar organization where your compensation is partly in the form of tokens, please go here to explore your options for liquidity backed by your crypto tokens. You can configure your loan in minutes and have it distributed to you immediately in either fiat US dollars or in the stablecoin USDC. Accelerate your financial progress with a loan backed by your crypto tokens!
If you have any questions, please reach out to us at support@archlending.com.