137 Ventures Offers A Liquid Alternative To Selling Stock On Secondary Markets

Over the last couple years, the hunt for employee liquidity has been a hot topic around companies like Facebook and Zynga, where valuations have surged but exits could still be years away. This has led to a rise in marketplaces like SecondMarket, which help connect employees eager to sell stock with potential buyers. And Russian firm DST has made major investments in Facebook, Zynga, and Groupon, which have gone toward giving founders and early employees some liquidity without increasing the number of company shareholders. Now there's a new firm that's hoping to add a new twist to the liquidity market.

It's called 137 Ventures, and it's giving early employees the opportunity to forgo selling their stock for the time being ? by using their stock as collateral for a non-recourse loan. The firm was covered today by The Wall Street Journal, which reported that 137 Ventures is raising upwards of $100 million to be used as loans to employees at these hot companies; the Journal also reports that 137 Ventures will charge "12% interest on the loans, as well as a 10% fee paid in stock". But Justin Fishner-Wolfson, a Founders Fund alum who now heads 137 Ventures, contends that the articles published today aren't entirely accurate.

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