12 Reddit employees used Equitybee to fund the exercise of their stock options between 2021 and 2023 - without spending any personal savings. When Reddit went public on NYSE in March 2024, these employees collectively retained $2.6M+ in proceeds, keeping an average of ~76% of the upside.
Equitybee connected them with investors who covered the full $1.3M+ exercise cost; employees only repaid after Reddit's successful IPO.
Reddit IPO
March 2024
(NYSE: RDDT)
$1,300,000+
$2,600,000+
~76%
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.
Common considerations Reddit employees faced:
• Exercising can require tens or even hundreds of thousands of dollars upfront
• Taxes, particularly AMT on ISOs, often create unexpected additional liabilities
• Employees may not want to lock up personal savings in a single illiquid, high-risk asset
• According to Carta, nearly 70% of employees ultimately walk away from their equity
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. How the Funding WorksIn return for the funding, once or if a liquidity event (such as an IPO or acquisition) occurs, the employees agree to:
• Repay the initial funding amount
• Pay an annual interest rate
• Share a percentage of the total stock’s gross value
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 Investor demand for that specific company, The market conditions at the time and 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 on NYSE in March 2024, these 12 employees were shareholders. As is standard with most IPOs, employees were subject to a lockup period and could not sell their shares immediately.
Without exercising their options through Equitybee, they would have forfeited their upside entirely.
$1,300,000+
$4,800,000+
$2,600,000+
~76%
Reddit is a powerful example: exercising stock options is not just about affordability — it's about timing, risk exposure, liquidity preference, and long-term financial strategy.
Thousands of startup employees have already used Equitybee to fund the exercise of their stock options, including employees at SpaceX, Databricks, Klarna, Stripe, Monday.com, Affirm, Rippling, Discord, Wiz, and many others. As of the date this case study was published, Equitybee has facilitated $271M+ in total capital, created 2,800+ new shareholders, and funded employees across 870+ pre-IPO companies.
Frequently asked questions
12 Reddit employees used Equitybee's non-recourse funding model to cover the full cost of exercising their stock options between 2021 and 2023. Equitybee connected them with investors who provided $1.3M+ in capital, covering exercise prices and associated taxes. The employees retained their shares and repaid only after Reddit's IPO in March 2024.
Reddit employees who exercised through Equitybee collectively retained $2.6M+ in proceeds from the company's NYSE IPO, keeping an average of ~76% of the upside.
Non-recourse stock option funding is a financing model where an investor covers the cost of exercising an employee's stock options. The employee retains their shares and only repays from the proceeds if there is a liquidity event that results in the shares becoming liquid, such as an IPO, acquisition, tender offer, or secondary sale. If no such event occurs, the employee owes nothing. As of the date this case study was published, Equitybee has facilitated this model for employees at over 870 pre-IPO companies.
No. Equitybee uses a non-recourse funding structure, meaning the employee's repayment obligation is tied to a liquidity event that results in the shares becoming liquid - such as an IPO, acquisition, tender offer, or secondary sale. If no such event occurs, the employee does not owe anything. The financial risk of the exercise is borne by the investor, not the employee.
Equitybee can help employees who are still employed as well as those who have left and are within their post-termination exercise window. Many employees face a 90-day deadline to exercise options after leaving a company, and the cost of exercising - often tens or hundreds of thousands of dollars - makes Equitybee's non-recourse model especially valuable in these situations.
As of the date this case study was published, Equitybee's average funding timeline is approximately 14 days from application to capital delivery. In fast-track situations, funding can be completed in as few as 2-3 days. The process is designed to meet time-sensitive deadlines, such as post-termination exercise windows or pending liquidity events.
