Founder Lombard loans.

A founder Lombard loan is a private loan secured by a pledge of a founder’s freely tradable listed shares, structured to release cash from a stake that is insider-restricted or too visible to sell. The founder pledges the holding as collateral, draws liquidity against a fraction of its market value, keeps beneficial ownership and voting, and recovers the shares in full on repayment, without a disposal or a signalling event. Shares still under a lock-up qualify once it ends.

Why founders borrow rather than sell

A founder's wealth is usually concentrated in one listed name — the company they built — and that is precisely the position they are most reluctant, and often least able, to sell. A sale sheds the upside in the asset the founder knows best, hands a signal to the market and to employees, and, once any lock-up has lapsed, can attract a discount for size.

Founders still have entirely ordinary reasons to want cash: to diversify a balance sheet that is otherwise a single stock, to fund a new venture, to meet a tax liability, or to make a personal purchase. A Lombard loan answers that need without touching the register or the cap table. The capital is released; the shareholding stays where it is. A founder whose company is not yet listed faces a different question, covered in borrowing against private company shares.

The constraints a founder facility must respect

What distinguishes a founder facility from an ordinary portfolio loan is the web of restrictions around the stock: lock-up terms, insider-dealing rules and closed periods, notification of dealings or of a charge over the shares, and disclosure thresholds. Post-IPO lock-ups restrain sale and transfer for a defined window, so shares under a lock-up are not freely tradable and are pledged only once it ends; the underwriting and lock-up agreements are read closely to confirm when that is.

Founders who serve as directors or senior managers are subject to insider-dealing rules and closed periods around results, and to obligations to notify dealings and, in several markets, to notify a charge granted over their shares. A substantial holding may also sit above a disclosure threshold, so that any change in the encumbrance of the stake must be reported. None of this prevents a Lombard loan; it shapes one.

The firm works to public information only, and plans timing around the founder's own calendar and counsel. Stock that is not yet vested or free to trade is covered in borrowing against restricted or unvested stock, and the full criteria in who qualifies for a Lombard loan.

How the facility is structured

Because the collateral is a single concentrated name rather than a diversified book, the loan-to-value is set conservatively and driven by the liquidity, free float, and volatility of that one stock, together with the size of the stake against the market's daily volume. Recourse is chosen deliberately: a founder who wants to ring-fence other assets will favour a non-recourse or limited-recourse profile, accepting a lower advance and a wider spread in exchange for that protection.

Pricing follows the usual pattern — a reference rate in the loan currency plus a spread — with no rate card, because the terms are a function of the specific holding. The shares are pledged to a qualified custodian under bankruptcy-remote arrangements, so the security is clean and the founder's ownership is preserved throughout the life of the facility.

Structuring at a glance

A founder Lombard loan releases liquidity from a listed founder stake without selling it. Loan-to-value is calibrated to that one stock rather than a portfolio average, the facility is frequently non-recourse or limited-recourse, and beneficial ownership and voting are retained through the pledge.