Tech Executives and Engineers: Diversifying Beyond Equity Compensation

In the tech world, compensation packages are often loaded with stock options, RSUs, or equity grants. For executives and engineers alike, this can feel like a golden ticket. If your company soars, your net worth skyrockets. But if the market turns—or your employer stumbles—you can watch years of wealth creation evaporate overnight.

That’s the reality of tying your financial future to one industry, one company, or even one stock. Which is why more tech professionals are asking: How can I build stability beyond equity comp?

One increasingly popular answer is private credit—a strategy that generates reliable income and adds diversification outside the tech bubble.

The Triggers: Why Tech Executives Are Looking Elsewhere

Overexposure to company stock. Tech professionals often have 40%, 60%, or more of their wealth tied up in equity comp. That’s concentration risk at its highest.

Volatility of the sector. Even great companies swing wildly with market sentiment, interest rates, or regulatory changes. Depending on one stock for your wealth is like riding a rollercoaster without a seatbelt.

Liquidity mismatch. Options vest, RSUs sell, taxes hit—but life expenses don’t always line up with stock cycles. Passive income helps bridge those gaps.

Desire for stability. Many tech leaders want predictable, contractual cash flow that isn’t tied to quarterly earnings calls or the next funding round.

What Private Credit Offers

Private credit, or private lending, involves providing loans—often secured by real estate—through funds that distribute the interest payments back to investors. Unlike equity comp, it doesn’t depend on valuation multiples or IPO markets.

• Steady income. Monthly or quarterly interest payments arrive like clockwork.
• Collateral-backed security. Loans are secured by tangible assets, often in first-lien position.
• Low correlation. Returns aren’t tied to Nasdaq performance, VC funding cycles, or IPO windows.
• Attractive yields. By accepting less liquidity than stocks, investors capture an “illiquidity premium,” often in the 8–10% range.

Why Private Credit Resonates with Tech Professionals

1. It Balances Equity Risk

Your stock comp may be the rocket fuel. Private credit is the anchor. It delivers returns that are stable, contractual, and backed by assets, helping to smooth out the ups and downs of concentrated equity exposure.

2. It Creates Income Flexibility

Instead of waiting for vesting schedules or liquidity events, you get regular distributions. That means money for life expenses, tax planning, or reinvestment—without touching your equity holdings.

3. It Preserves Mental Bandwidth

You already spend your days solving complex problems. Private credit is intentionally hands-off. A professional fund handles origination, underwriting, and servicing. You just decide how much to allocate and whether to reinvest your distributions.

4. It Speaks Your Language: Risk and Reward

Engineers and executives know that smart systems include redundancy and fail-safes. Private credit applies the same principle to wealth: conservative loan-to-value ratios, collateralized structures, and disciplined underwriting create safeguards around your capital.

Example: Equity-Heavy vs Diversified

Consider a senior engineer with $1,000,000 net worth, 80% of it in company stock.

• If the stock falls 30% in a market correction, portfolio drops to $700,000.
• If instead, $300,000 is diversified into private credit earning 9% annually, the portfolio not only cushions volatility but produces $27,000 in steady annual income.

That income arrives regardless of stock swings—creating stability without selling core holdings.

How to Start Diversifying Beyond Equity

• Evaluate your concentration. Know how much of your net worth is tied to company equity.
• Decide your income goals. Are you looking for monthly cash flow, or compounding through reinvestment?
• Find the right manager. Look for private credit funds with a track record, first-lien positions, and conservative underwriting.
• Allocate gradually. Even shifting 15–25% of assets into private credit can meaningfully reduce volatility and improve income stability.

Why LBC Capital Income Fund, LLC Works for Tech Investors

At LBC Capital Income Fund, LLC, we structure private credit strategies specifically for high-earning professionals who want reliability beyond their day jobs.

• First-lien lending: All loans are secured by California real estate.
• Conservative loan-to-value ratios: Typically 60–65%, ensuring a strong equity cushion.
• Monthly distributions: Giving you income that doesn’t depend on markets or vesting cycles.
• Aligned incentives: Our management invests alongside our clients.

For tech executives and engineers, this means a way to complement equity upside with fixed income stability—without the hassle of managing real estate or chasing speculative deals.

Balance Your Portfolio Like You Balance Code

In engineering and leadership, redundancy isn’t wasted—it’s essential. The same applies to your finances. Equity compensation can create life-changing wealth, but only if it’s paired with strategies that protect you when markets shift.

Private credit delivers that balance. By diversifying into secured, income-generating assets, you create a portfolio that’s not just about potential—but about stability, resilience, and peace of mind.

For tech executives and engineers looking beyond equity comp, private credit may be the smartest next step. Reach out to talk to our fund manager. It is non-obligatory.