Last week my friend Chris Albinson formed an interesting new firm called Founders Circle Capital. He wrote a bit about what they are doing here.
In a nutshell, Founders Circle provides liquidity for the founders and employees of a “breakaway growth companies” so they don’t need to sell or take the company public prematurely. I like this line from the post I linked to above:
An investment from Founders Circle–typically just enough for team members to pay off graduate school debt, put a down payment on a house, send the kids to school, or pay for a loved one’s medical expenses–gives companies the flexibility to pass on early acquisition offers and motivates essential team members to stay at the company they have put their heart and soul into.
Of course the question is always “when is the right time to do this?”. You should not do this sort of thing too early in a company’s life. It takes time for the equity value to get to a point where it makes sense for the founders and employees to take a bit of their equity value off the table. I guess that’s why they focus on “breakaway growth companies”. That’s smart.
If you want to learn more about Founders Circle, here’s a page on their website that outlines the kinds of investment programs they operate. It’s great to have investment vehicles like Founders Circle in the venture capital market. It provides an important part of the “capital stack” that startups need to access to go all the way to the finish line.
