A non-recourse cash advance against the future settlement value of double-trigger RSUs you don't yet own.
Employees holding double-trigger RSUs own zero actual shares while the company remains private. They hold a contractual promise. They cannot legally execute a direct secondary sale, initiate a VPFC, or participate in a standard tender offer because they possess no transferable property. RSU Liquidity Advances were engineered by elite specialty credit funds specifically to bridge this gap. Rather than purchasing non-existent shares, the fund issues a non-recourse cash advance secured by a forward-looking lien against the future settlement value of the RSUs.
Because the employee is pledging future corporate proceeds rather than currently owned property, the transaction requires explicit, bespoke approval from the issuing company's board of directors. The advance is sized against the estimated net after-tax settlement proceeds, not the gross RSU value. At IPO, the ordinary income tax on RSU settlement can consume approximately 40% of the gross value. The lender must account for this: a $1M gross RSU value might yield only ~$600K after ordinary income withholding, and the advance is sized against that net figure. This severely limits the total cash an employee can pull forward relative to the headline value of the RSU grant.
If the company successfully IPOs or is acquired, the RSUs settle into actual shares, the ordinary income tax is assessed and automatically withheld by the company, and the remaining net cash or shares are routed directly to the lender to clear the advance principal and accumulated fees. The lender's risk profile is extreme: if the company never achieves a liquidity event, or if the employee quits or is terminated before the event (failing the 'must be present to win' double-trigger requirement), the RSUs expire worthless. The non-recourse nature means the lender absorbs the total loss. This risk is why RSU Liquidity Advances are only available at elite late-stage companies with near-term exit visibility.
Because you're pledging future corporate proceeds rather than currently owned property, the transaction creates a lien on assets that technically flow through the company's equity settlement process. The company's board must approve this arrangement. It can be a significant administrative hurdle and some companies are reluctant to approve it.
Significantly less than the headline value of your grant. If your RSUs are valued at $1M based on the current 409A, expect roughly 40% to be withheld for ordinary income tax at settlement. The advance is then sized against the remaining ~$600K, and the lender will advance a fraction of that (accounting for their fees and the risk of the company not exiting). Real advance amounts are often 30–50% of the gross RSU value.
This is the 'must be present to win' problem with double-trigger RSUs. If you leave before the liquidity event, your unvested RSUs typically expire. The second trigger is never met. This means the lender's collateral (the future settlement value) disappears. The advance is non-recourse, so the lender absorbs the loss, but you also lose any remaining vesting and any chance of RSU settlement value. The lender will factor employment stability and cliff dates heavily into their underwriting.
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