Belief in equity

Since I started at Secfi in 2018, the overall employee belief in equity may be at an all-time low. If you think about the dynamics of this tough time in tech, you can start to see why.

Employees joined these promising startups in 2019-2021 when companies were growing like crazy and booming. They raised significant capital at high valuations and their equity had been significantly appreciated.

Now with the market correcting itself, their equity has significantly gone down in value. And to make matters worse, many of these companies do not have a liquidity event in near sight. The secondary markets exist for a handful of companies right now, but that’s only for a select few companies out there.

It’s hard to stay the course for many folks given the circumstances. A lot of people have just outright given up on their equity as they may not ever realize value from them, and unfortunately many of them are right.

However, everything is circumstantial depending on the company. And we know that the markets are cyclical. There will be more liquidity events in the future for a lot of companies including IPOs and acquisitions. But to get there, we’re going to need to see things start resetting which hasn’t fully happened yet.

Companies will unfortunately shut down at worst and raise down rounds. Some will emerge from this stronger. However, these things take time and we’ve still yet to see everything unfold.