Tender offer

How it works

Tender offers became common at late-stage unicorns (Stripe, Databricks) as a way to give long-tenured employees liquidity without going public. They're typically run annually, with caps on how much each seller can offload. The price is usually set below the latest preferred-stock valuation to reflect the difference between common and preferred.

Related terms

• Secondary sale
  A secondary sale is the sale of existing shares (from founders, employees, or early investors) to a new buyer — distinct from a primary fundraise where new shares are issued.
• IPO (Initial Public Offering)
  An IPO is the first sale of a company's stock to the public, listing the shares on a stock exchange — historically the most common exit for venture-backed companies.
• 409A valuation
  A 409A valuation is an independent third-party assessment of the fair-market value of a private company's common stock, required by the IRS to set the strike price for stock options.