Well, it might be a good idea, but there is a lot of risk. There is, for example, a risk that the employees get utterly screwed and are never permitted to cash out.

That isn’t a risk. That’s a near certainty.

You can price risk. People buy distressed debt. No reason why they wouldn't buy illiquid private company stock (at a discount the holder might not like obviously).

That does exist. I was able to do that with options at my last job with Carta.

There are, I think. Forge global and others have services like this.

You mean a loan? I think banks do that ;)

You're right, I guess it would just be a loan with interest rate and terms fit for the risk. But I wonder if the financially rational terms might fall afoul of usury regulations or something. So I wondered if the lender would have to structure it other than a simple "loan" to get around that.

But I'm deeply ignorant of that world so may be making this much more complicated than it actually is.

There are. That's why we have created Equitybee (https://news.ycombinator.com/item?id=35083120)