Quid Raises $320M to Help Tech Employees Cash Out
Ben Bergman is the newsroom's senior reporter, covering venture capital. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks. Follow him on Twitter.
If you're an employee at a hot startup like SpaceX or Scopely, you are probably lucky enough to own valuable shares in the company. But until your employer goes public – an increasingly elusive occasion – those shares represent little more than numbers on a cap table.
"People are really wealthy on paper, but they can't send their child to the school they want or buy their first home," said Josh Berman, CEO of Quid Capital Group, which announced Wednesday it has raised a $320 million second fund to offer liquidity to startup employees.
Startup employees have long been able to trade their shares on secondary markets. With Quid, they keep most of their shares and get a loan of up to 35% against their equity. In return, they pay an interest rate of around 7%, which is not due until the shares go public. They also give Quid a small percentage of shares.
"If the company cranks, we want a share of the upside," Berman said.
Because its collateral in the shares themselves, Quid only makes loans to employees at startups it judges to be sufficiently worth the risk. Since launching in 2017, it has doled out more than $100 million to employees at 24 startups including Airbnb, Uber, and Lyft.
Quid's model has become increasingly necessary as startups, awash in hundreds of millions in late stage capital, take far longer to go public than used to be the case.
Berman is a co-founder of MySpace, one of the earliest Los Angeles tech companies, and Quid is based in Santa Monica. But so far the only company it has partnered with here is the e-scooter unicorn, Bird Rides Inc.
Quid Managing Partners Josh Berman (left) and Anthony Tucker
"Most of our business is in San Francisco, but there are companies we love in L.A.," said Berman.
He says he plans for the second fund to target employees at 24 high-growth companies, including local unicorns Scopely, SpaceX, and Jam City.Quid, which was spun out of Troy Capital Partners and Oaktree Capital earlier this year, is also backed by Davidson Kempner Capital Management and a group of investors including Spencer Rascoff, dot.LA's co-founder and executive chairman.
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Andrew Peterson<p>Andrew Peterson is the co-founder and former chief executive of Signal Sciences, a web application security platform that he founded in 2014 and <a href="https://dot.la/signal-science-snapped-up-for-775m-in-big-l-a-saas-exit-2647256430.html" target="_self">was acquired in 2020 by Fastly in a $775 million deal</a>. Signal Sciences protects web applications from attacks and data breaches for clients like Duo Security, Under Armor and DoorDash.</p><p>Prior to starting Signal Sciences, Peterson worked at Etsy, helping the online marketplace with international growth as a group project manager. Etsy <a href="https://www.fastcompany.com/3056900/how-three-ex-etsy-employees-turned-their-old-employer-into-a-consumer" target="_blank">reportedly became </a>one of Signal Sciences's first customers. Peterson has also served stints as health information management officer at the Clinton Foundation and as a senior product specialist at Google.</p>
Ara Mahdessian<p>Ara Mahdessian is the co-founder of ServiceTitan, a SaaS product for managing a home services business.</p><p>The inspiration for ServiceTitan, Mahdessian's first company, came from watching his parents start their own businesses in building and plumbing, only to struggle with the logistics behind keeping them running, he <a href="https://www.inc.com/magazine/201906/emily-canal/servicetitan-immigrant-inclusion-diversity-best-workplaces-2019.html" target="_blank">told Inc in 2019</a>. Mahdessian and his co-founder Vahe Kuzoyan met while in college, and worked on several consulting projects before starting ServiceTitan, in hopes of aiding small business owners like their parents.</p>
Evan Spiegel<p>Evan Spiegel is the co-founder and chief executive officer of Snap Inc., the Venice-based company known for its app Snapchat. He's also one of the youngest billionaires in the world, launching Snapchat while still an undergraduate at Stanford. </p><p>SnapChat, the company's app, has recently been taking on rival TikTok <a href="https://dot.la/snap-spotlight-2649022645.html" data-linked-post="2649022645" target="_blank">with a new feature</a> and a program meant to attract creators to its platform. And it is been at the center of a larger national debate on the power of big tech. </p>
Spencer Rascoff<p>Spencer Rascoff is the founder of several companies, including dot.LA. He started his career as an investment banker at Goldman Sachs, later leaving to co-found travel website Hotwire. After serving as vice president of lodging at Expedia, he went on to found Zillow, an online real estate marketplace that went public in 2011.</p><p>Rascoff's most recent project is Pacaso, a marketplace for buying, selling and co-owning a second home.</p>
Tim Ellis<p>Tim Ellis is the co-founder and chief executive of Relativity Space, an autonomous rocket factory and launch services leader for satellite constellations. He is the youngest member on the National Space Council Users Advisory Group and serves on the World Economic Forum as a "technology pioneer."</p><p>Before founding Relativity Space, Ellis studied aerospace engineering at the University of Southern California and interned at Masten Space Systems and Blue Origin, where he worked after graduation. He was a propulsion engineer and brought metal 3D printing in-house to the company.</p>
Travis Schneider<p>Travis Schneider is the co-founder and co-chief executive of PatientPop, a practice growth platform for healthcare providers. He founded the company with Luke Kervin in 2014. <br><br>The two have founded three companies together, including ShopNation, a fashion shopping engine that was later acquired by the Meredith Commerce Network.</p>
Luke Kervin<p>Luke Kervin is the other co-founder and co-chief of PatientPop. He is a serial entrepreneur — his first venture was Starbrand Media, which was acquired by Popsugar in May 2008. <br><br>Kervin and Schneider then founded ShopNation, and when it was acquired in 2012, Kervin served as the general manager and vice president at the Meredith Commerce Network for a few years before leaving to found PatientPop.</p><p>Kervin had the idea for PatientPop when he and his wife were expecting their first child, he told <a href="http://voyagela.com/interview/meet-luke-kervin-patientpop-santa-monica/" target="_blank" rel="noopener noreferrer">VoyageLA</a>. They were frustrated with how the healthcare system wasn't focused on the consumers it was meant to serve. So in 2014, he and Schneider created PatientPop.</p>
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