Quid Capital Group (“Quid”) announced it has raised $320M in a second fund to offer liquidity benefits to shareholders at high-growth private technology companies. Quid partners directly with businesses and shareholders to provide streamlined access to personal capital, using only the shareholder’s equity as collateral. Quid’s second fund is backed by Oaktree Capital Management (“Oaktree”), Davidson Kempner Capital Management LP (“Davidson Kempner”), and a leading Northeast based Ivy League endowment, as well as a strategic group of investors which include board members at leading late-stage technology companies.
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Quid Managing Partners: Josh Berman (left), Anthony Tucker (right), Samit Varma (not present in photo) (Photo: Business Wire)
Quid launched its first fund at the end of 2017 as a pioneer among a growing sector of non-recourse loan products, which has since deployed more than $100 million in loans to shareholders at 24 high-growth companies, including Unity, Palantir, Uber, and Lyft. In addition to providing capital directly to shareholders, Quid will now focus on tailored company-wide programs.
“Quid’s goal is to identify a select group of high-growth, late-stage companies and provide their shareholders with the most efficient liquidity possible. The Quid solution seeks to optimize tax, option exercise, and liquidity planning for our customers. We have seen regular, programmatic, shareholder liquidity become a retention requirement for any top of the line late-stage company,” said Josh Berman, CEO of Quid.
Historically, shareholders’ liquidity options have included secondary market sales, which often create sub-optimal tax consequences, result in broker fees and violate company transfer restrictions. Shareholders who sell also exit their positions and eliminate the potential for upside appreciation. Quid seeks to solve this by providing the capital, liquidity education, and product offering to companies so that their finance, legal, and HR teams can focus on running the business day to day as they approach a liquidity event. Additionally – the Quid solution does not impact a company’s balance sheet or cap table.
“The Quid team has done an incredible job of solving the illiquidity issues of late-stage private tech markets. We could not be more excited about the growth, proliferation, and adoption of the Quid liquidity solution. Quid has worked with founders, executives, and operators at some of the most successful companies in the world, solidifying themselves as a preeminent, blue-chip provider of liquidity/option exercise to any late-stage private technology company or shareholder. We look forward to partnering with them on future funds starting with Quid 2,” said Brian Laibow, Co-Head of North America & Managing Director of Opportunities Funds at Oaktree.
Quid works with a select group of companies, a strategy that has allowed Quid’s first fund to offer loans to shareholders across 24 companies since the end of 2017. Quid’s new fund is targeting the next 25 highest-growth startups on track to IPO, with intentions to allocate up to $30M per company.
In contrast with traditional loans secured by personal assets, Quid’s loans are collateralized by private stock alone. Quid lends a startup’s employees’ money, up to 35% of the stock’s value. The employee can keep the shares, with no fees taken out of pocket at the time of the loan. The loan is repaid when the company goes public or there is another liquidity event.
About Quid Capital Group
Quid Capital Group manages a series of funds dedicated to offering a new kind of loan on pre-IPO equity. There is generally no personal liability on the loan. The loan is designed to be fully compliant with most company policies, allowing employees and shareholders to enjoy cash today without any out-of-pocket expenses. The loan is repaid when the company goes public or has another liquidity event, and the employees keep most of the upside. Quid funds are backed by Oaktree, Davidson Kempner, and a leading Northeast based Ivy League endowment. Quid is managed by Josh Berman, Samit Varma, Anthony Tucker. To learn more about Quid, visit https://www.getquid.com/.
About Davidson Kempner Capital Management
Davidson Kempner Capital Management LP (“Davidson Kempner”) is a U.S.-registered global institutional investment management firm with more than 35 years of experience and a focus on fundamental investing with a multi-strategy approach. Davidson Kempner has over $34 billion in assets under management with over 400 professionals in five offices (New York, Philadelphia, London, Hong Kong and Dublin).
Oaktree is a leader among global investment managers specializing in alternative investments, with $140 billion in assets under management as of September 30, 2020. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in credit, private equity, real assets and listed equities. The firm has over 1,000 employees and offices in 19 cities worldwide. For additional information, please visit Oaktree’s website at http://www.oaktreecapital.com/.