Animal Spirits Podcast Talk Your Book: Investing in Start-Up Equity
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Oct 18, 2025 Dave Thornton, Co-founder, CEO, and CIO of Vested, dives into the complexities of helping startup employees exercise options. He explains the common challenges faced by employees, particularly the 90-day exercise problem. Thornton discusses Vested's innovative funding model that allows employees to avoid losing shares. He also explores how Vested uses machine learning to assess fair market values of private companies and the importance of diversification in venture capital investments, all while navigating the competitive landscape of employee liquidity programs.
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Forward Contracts Became Practical Choice
- Companies often prefer Vested use forward contracts to avoid on‑cap‑table plumbing and board work.
- That practical preference forced Vested to build strong monitoring of delivery risk.
Use Data And Signals To Pick Companies
- Build and use data-driven models combining financing, employee flows, and proprietary signals to price private companies daily.
- Cut your investable universe to the top deciles to focus on firms with remaining growth.
Huge Addressable Market In Small Tickets
- The small-ticket employee exercise market is a large, diffuse opportunity and likely a multi‑billion dollar annual market.
- Much of employee-owned private equity will otherwise expire or vanish across cycles.