For employees holding shares or options in a company approaching an IPO, a public listing can bring new choices as well as new financial obligations. In this interview with TechBullion, Terence McMenamin, Co-founder and CEO of Techdollar, discusses pre-IPO employee liquidity, how lock-up periods can affect access to shares, and why tax planning matters. He also examines the decision to sell, hold or borrow against equity, helping employees understand the considerations involved before acting on the value they have built.
1) Could you tell us your name, a little about yourself and what pre-IPO employees ask most about selling, holding or borrowing. What do they underestimate about sudden paper wealth?
I’m Terence McMenamin, CEO and co-founder of Techdollar. Before Techdollar, I was an ed-tech founder and spent more than six years building products and institutional relationships across crypto and structured finance. Techdollar came from seeing the same problem repeatedly: people could have life-changing wealth on paper but no practical way to use it.
The question employees keep coming back to is whether they should sell, hold or find another way to access liquidity. What they often underestimate is the difference between net worth and usable cash. You can own millions of dollars of private-company equity and still struggle to fund a home purchase, a tax bill or another major expense. As companies stay private longer, that gap can last for years. The goal is to give people another option besides simply waiting or selling an asset they still believe in.
2) What does Techdollar’s approach of issuing a dollar token against secured credit facilities, with drawdowns to a bank account or in USDC or USDT, offer an employee compared with traditional securities-based lending?
For the employee, the experience is intentionally much simpler than the infrastructure behind it. They pledge vested private-company equity as collateral for a secured credit facility and can access the proceeds through a bank account or, if they prefer, through USDC or USDT.
The important difference is that we are building specifically for private-company equity, which traditional lenders often struggle to price or will only lend against for very large or executive-level borrowers. We use current private-market information to underwrite the collateral rather than treating all startup shares as the same speculative asset. The blockchain component is primarily on the capital side. A borrower does not need to be a crypto user to benefit. From their perspective, it should feel much more like borrowing against the equity they already own than participating in a crypto product.
3) How are Techdollar facilities structured, and what should a borrower understand about the terms before pledging their shares?
Every facility is structured as secured private credit against vested equity. We verify ownership and the legal ability to establish a security interest, underwrite the company and borrower, assess current secondary-market pricing and liquidity, and then issue facility documents based on that risk.
Our pricing and loan-to-value limits are collateral-dependent rather than one-size-fits-all. Historically, our underwriting work has centered around an average maximum LTV of roughly 40% with
double-digit annual pricing, although borrowers have generally drawn closer to 20% to 30% of collateral value. A borrower should understand the interest rate, fees, maturity, repayment obligations, what constitutes a default, and exactly what happens to the pledged shares if they fail to repay. Most importantly, this is still borrowing. Preserving upside does not eliminate downside, and pledged collateral can be lost in a qualifying default.
4) How does Techdollar work within the restrictions many private companies place on pledging or transferring shares, and how is each facility documented and verified?
Private-company shares are not public stocks, so you cannot assume they can simply be pledged or sold without restrictions. We treat that as part of the underwriting process, not something to solve after a problem occurs.
Techdollar does not need to tokenize the underlying shares. The collateral arrangement is documented through traditional legal instruments, with a protected security interest established over the pledged equity. Ownership, legal agreements and share charges are verified before a loan is issued, with RSM supporting the equity review process. We also work with private-market data and counterparties to understand secondary demand and potential transfer pathways. Ownership of the shares remains with the borrower unless a qualifying default occurs. That structure is important because the product is ultimately secured private credit, even if digital infrastructure is used behind the scenes to make the capital more efficient.
5) How should employees build plans that hold up across a range of share prices once a lockup ends, rather than relying on the opening-day valuation?
The biggest mistake is building a financial plan around a single share price. A listing gives you a visible market price, but that price can move significantly before an employee is actually able or willing to sell.
I think employees should model several scenarios: what happens if the stock is materially higher, roughly flat or materially lower when their shares become available? Then work backward from actual needs. How much cash do you need? What tax obligations or large expenses are coming? How much exposure are you comfortable continuing to hold? The point is to separate the company you believe in from the financial obligations you personally have. A good plan should still make sense if the market does something very different from what you expected on listing day.
6) What planning habits help employees use the lockup period well when making spending commitments against expected wealth?
Treat expected wealth as expected wealth, not cash already in the bank. A lockup is useful planning time because it forces you to confront the gap between the headline value of your shares and what you can actually access.
Before making large commitments, employees should understand their vesting and lockup schedule, identify upcoming tax and cash needs, and model what their equity would be worth at several different prices. They should also understand what liquidity options are actually available to them rather than assuming a future sale will solve everything. That may include waiting, selling when permitted, or borrowing against eligible vested equity. The broader principle is simple: avoid making
fixed spending commitments based on a variable asset before you know when and how that asset can become liquid.
7) What framework do you use for the sell, hold or borrow decision, which facts about a person’s situation decide the right path, and when is each option most appropriate?
I start with a simple question: what problem are you actually trying to solve? If you no longer want the exposure or need to reduce concentration, selling may be the cleanest answer. If you do not need liquidity and remain comfortable with the risk, holding may make sense. Borrowing becomes relevant when you need capital today but still want to retain ownership and potential upside.
Then you have to look at the facts: how much of your net worth is tied to the company, how much cash you need, what the borrowing cost is, what tax consequences a sale could create, how liquid the shares are, and how much downside you can tolerate. Borrowing is not automatically better than selling. It adds an obligation and puts collateral at risk. The value is that employees now have a third option to evaluate instead of treating a sale as the only path to liquidity.
8) How does Techdollar set loan-to-value limits, and how are borrowers supported if share prices move during a lockup?
We do not set LTV by putting every private company into the same risk bucket. We look at the specific company, the borrower, current secondary-market pricing, depth of demand for the shares and how readily that collateral could be sold if necessary.
We use private-market data to monitor where shares are actually trading rather than relying only on the last funding-round valuation. That allows a credit line to respond to changes in the market. While Techdollar can permit higher LTVs depending on the collateral, borrowers have generally drawn around 20% to 30% of collateral value. That conservatism matters because private-company prices can move. The goal is to give borrowers useful liquidity while maintaining enough cushion that normal repricing does not immediately turn a liquidity solution into a forced-sale problem.
9) How do the costs compare for a typical borrower between a Techdollar facility, a secondary sale and simply waiting, and at what point does each option make the most sense?
There is no universal cheapest option because each one has a different economic trade-off. Waiting has no borrowing cost, but it also provides no liquidity and leaves the employee fully exposed to the company. Selling provides cash and removes some exposure, but it permanently gives up the future upside on the shares sold and may create tax consequences. A private secondary sale can also
involve a discount depending on the company and market.
Borrowing preserves ownership, but the borrower pays interest and fees and takes on repayment obligations. Our facilities are priced based on the collateral and borrower, so the comparison has to be made case by case. The right question is not just “which has the lowest fee?” It is “what am I paying for liquidity, what risk am I retaining, and what ownership am I giving up to get it?”
10) What are the two most common mistakes employees make around a public listing, and what should they do instead?
The first is treating the headline value of their equity as if it is already cash. A listing does not necessarily mean an employee can sell immediately, and the share price can change significantly
before their actual liquidity window.
The second is making the decision entirely around the company and not around their own financial life. Employees can be deeply confident in the business they work for and still need to think about taxes, concentration, major expenses and how much risk they can personally carry. Instead, I would use the period before liquidity to map out those obligations, understand the exact restrictions on the shares and evaluate several scenarios. The objective is not to predict the perfect price. It is to avoid being forced into a decision because you failed to plan for a foreseeable cash need.
11) How should employees whose salary, equity and career are tied to a single frontier technology company think about diversification once the lockup ends?
When your salary, career and a large portion of your net worth all depend on one company, you have multiple forms of exposure to the same outcome. That is worth recognizing even if you have enormous conviction in the company.
I do not think the answer is automatically to sell everything the moment a lockup ends. The more useful question is how much concentration you are comfortable carrying relative to your cash needs, obligations and broader financial goals. For some employees, that may mean selling a portion over time. For others, borrowing against a conservative portion of vested equity may provide liquidity while preserving ownership. The important thing is to make that choice deliberately rather than allowing a lack of liquidity to make the choice for you. Employees should work with independent advisers on the diversification strategy appropriate to their circumstances.
12) How do you help employees plan for market volatility while staying confident in the company they work for?
Conviction and liquidity planning are not opposites. You can believe deeply in the company you work for and still acknowledge that private and public market prices move, personal expenses arrive, and concentration creates risk.
Our approach is to avoid making the entire decision depend on one valuation. We look at current secondary-market pricing, build in collateral cushions and structure borrowing conservatively relative to the value of the shares. For the employee, that can create room to meet a real cash need without making an all-or-nothing decision about the company. But borrowing is still a financial obligation, so the amount has to make sense even if the equity is repriced. The goal is not to tell someone whether their company will go up or down. It is to give them another tool for managing the gap between long-term conviction and short-term liquidity.
13) How does Techdollar help employees make well-informed decisions, and how do you encourage them to work alongside independent tax and financial advisers?
Our role is to make the financing itself understandable: what the collateral is worth based on the information we can observe, how much someone may be eligible to borrow, what the facility costs, what their obligations are and what happens in a downside scenario.
We also think it is important to be clear about what Techdollar is not. We are not a registered investment adviser, and we are not replacing an employee’s tax attorney, accountant or financial adviser. Selling, holding and borrowing can each have very different implications depending on the person. We want borrowers to understand the credit product clearly and then evaluate it alongside
independent advice about taxes, diversification and their broader financial plan. Better information should expand someone’s choices, not pressure them into one.
14) How does Techdollar approach diversification across companies and sectors as private markets grow, and how is the business built to perform across different market conditions?
We are deliberately focused on high-quality frontier technology collateral where we can identify real secondary-market demand. That can include areas such as AI, robotics, autonomy, defense technology and other deep-tech businesses, but the underwriting decision is made company by company. A compelling sector does not automatically make every company good collateral.
The business is also designed around the reality that private valuations will not move in one direction forever. We use secondary-market information, conservative LTVs and an underwriting process that asks how saleable an asset would be in a downside scenario. We establish potential liquidity pathways before a default rather than assuming buyers will appear afterward. In that sense, a market correction is not something we can ignore. A private-credit business has to be built with repricing, defaults and periods of tighter liquidity in mind from the beginning.
15) What one piece of advice would you give an employee who will become a paper millionaire at a listing this year?
Do not confuse becoming a millionaire on paper with suddenly having a million dollars to spend.
Understand exactly what you own, when you can access it, what obligations may come due and what you actually want the money to do for your life. Then build a plan that still works if the share price changes. You may ultimately sell some, hold some or borrow against some. The important thing is not to let a headline valuation make the decision for you. A listing is a major milestone for the company, but for an employee it should be the beginning of a thoughtful liquidity plan, not the end of one.
