Vested neutralizes non-delivery risk, a major concern in private markets. By funding exercises, they ensure the employee retains a majority of their stock, aligning incentives. Small deal sizes ($50k-$100k) make it economically irrational for an employee to default and ruin their reputation, leading to a 100% delivery rate.
Vested initially assumed employees needed cash for life events like buying a home. They discovered the dominant, urgent need was from recently departed employees facing a 90-day window to exercise their options before they expire worthless. This single, acute problem became the company's entire focus.
Vested sources a differentiated data set by analyzing private company performance through state and local tax and labor filings. While the absolute numbers are often inaccurate for any given company, they are consistently inaccurate. Therefore, the trend line provides a reliable and valuable signal for a company's growth or decline.
Vested's investment model gains an edge from proprietary data on employee sentiment and behavior. Signals like unsolicited negative comments, willingness to counter on price, or selling more shares than necessary provide unique insights into a company's health that traditional financial analysis lacks, forming a data moat.
Vested works directly with employees because startups find small, one-off secondary transactions burdensome due to legal fees and cap table complexity. However, this dynamic inverts at scale. Once Vested facilitates millions in transactions for a single company's stock, the startup has a strong incentive to partner on a formal liquidity program.
Acknowledging venture capital's power-law returns makes winner-picking nearly impossible. Vested's quantitative model doesn't try. Instead, it identifies the top quintile of all startups to create a high-potential "pond." The strategy is then to achieve broad diversification within this pre-qualified group, ensuring they capture the eventual outliers.
Vested's CEO, Dave Thornton, a finance veteran, realized the massive market need for startup equity guidance only after his own mistaken advice led his employee to a huge tax bill during an acquisition. This personal failure highlighted that even financially savvy individuals struggle with the complexity of stock options.