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How Can I Get Early Founder Liquidity?

SaaS startup with $1mm ARR, rapid growth opportunity to accelerate very quickly. Have early investors in a convertible note which has not impacted the CAP table too negatively to get to this point. May still be out 12 months to get the attention for Series A. We have the ability to bring in additional angel investors, which we are currently doing.

Putting everything into the business has put me in a bad position from a personal finance standpoint. I need to get some founder liquidity but clearly too early for secondary fund market. We are focusing on our angel investments to fund the business to series A.

What can I do to sell or borrow against existing common shares? Only enough ($200k – $250k) to get my family finances stable now that the company is also getting financially stable, nothing that would possibly spook investors that I am getting out as a non-believer?

What options do I have? Credit has been negatively impacted so refi, personal loans, credit cards to float are not an option. I am left with how can I leverage my shares to bail my family out now?

  • Have you hit up your 401k? I was forced to withdraw and take the penalty and tax hit due to a similar situation. It was better than any alternative I could come up with.

    Another option I was about to do was a private agreement between another individual that was between me and him, based on a very conservative value of the equity. I didn’t get to the legal specifics so not sure what those are.

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