As Startups Stay Private Longer, Tender Offers Become the New Standard for Employee Liquidity

In the modern landscape of high-growth technology companies, the path to an Initial Public Offering (IPO) has become increasingly elongated. Where once a rapid sprint to the public markets was the standard exit strategy, today’s most promising startups are choosing to remain private for 12 to 15 years. While this extended private lifecycle allows companies to mature away from the intense quarterly scrutiny of Wall Street, it creates a significant dilemma for the workforce. Employees at these companies often receive a substantial portion of their compensation in the form of equity—stock options or restricted stock units—that remain essentially illiquid for over a decade.

This structural disconnect between long-term value creation and immediate financial needs has left many workers with significant "paper wealth" but little ability to fund life milestones like purchasing a home, paying for education, or diversifying their investments. Recognizing this, a growing number of late-stage startups are pivoting toward a more flexible approach: the company-sponsored tender offer.

A tender offer is a structured transaction that enables current and former employees, and occasionally early investors, to sell a portion of their vested equity to an approved investor at a predetermined price. It is a mechanism that transforms frozen assets into liquid capital without the company needing to undergo the complex and costly process of going public.

To streamline this complex financial maneuver, NewView Capital, a firm that specializes in secondary market deal-structuring alongside traditional venture capital, has entered into a strategic partnership with the equity management platform Carta. This collaboration is designed to bridge the gap between NewView’s expertise in secondary transactions and Carta’s robust digital infrastructure for equity administration.

Ravi Viswanathan, founder and managing partner of NewView Capital, believes this alliance will act as a catalyst for founders who are hesitant to manage the administrative burden of liquidity programs. "The hope is that this partnership will make it easier for CEOs and companies to think about tenders," Viswanathan said. He characterizes these programs as a "win-win-win" scenario: employees gain access to the wealth they have helped build, the company secures a powerful retention tool, and investors gain access to shares in high-performing private companies that are otherwise difficult to acquire.

The data supports the notion that this practice is gaining momentum. According to a recent study conducted by NewView and Carta, the frequency of tender offers for companies at the Series C stage and beyond has tripled over the last three years. This trend suggests that the appetite for liquidity is not limited to a small circle of ultra-high-value "mega-unicorns." While massive companies like OpenAI, Databricks, and Anduril have famously utilized such structures, the practice is trickling down to mid-sized private companies.

Viswanathan points to Hightouch, a marketing customization startup within the NewView portfolio, as a prime example. The company successfully executed a tender offer last year at a valuation of $1.3 billion, demonstrating that a company does not need to be a household name to provide its staff with a liquidity event.

Despite this upward trajectory, the widespread adoption of tender offers is still in its early stages. The combined data from NewView and Carta reveals that the overall share of startups launching these offerings remains relatively small. In the first half of 2026, for instance, only 44 such transactions were executed across their dataset. Viswanathan views this as a significant opportunity for growth and is actively encouraging more founders to view liquidity not as a distraction from the company’s core mission, but as a critical component of their human capital strategy.

The shift in perspective is driven largely by the evolving realities of the talent market. A decade ago, the prestige associated with working for a "unicorn"—a company valued at $1 billion or more—was often sufficient to attract and retain the best talent in the industry. Today, with the proliferation of billion-dollar startups, that label has lost some of its competitive luster. In an environment where top-tier talent has numerous options, offering a tender program has become a way to differentiate a company’s compensation package. It serves as a tangible signal that the company values the long-term contribution of its staff and is committed to ensuring they participate in the financial upside of their labor.

Several high-profile companies have already embraced this philosophy as a core element of their operational strategy. For example, the AI-focused customer support platform Decagon recently completed its first tender offer at a $4.5 billion valuation. Similarly, the self-driving technology developer Wayve launched an $85 million employee tender offer at an $8.5 billion valuation. Perhaps most notably, AI voice generator ElevenLabs executed two such offerings in the span of less than a year, signaling that companies are becoming increasingly comfortable with conducting recurring liquidity events to keep their employees incentivized.

The necessity for these programs is underscored by the current climate of the private markets. With the trend of staying private for 12 to 15 years showing no signs of reversing, the traditional "wait for the IPO" mentality is becoming untenable for many employees. "The companies are staying private for 12 to 15 years. That’s not changing," Viswanathan noted. "In that interim, so that we don’t have this talent drain from high-quality venture-backed companies into their public counterparts, we need to make sure that there is liquidity for the employees."

For founders and boards, the challenge lies in balancing the desire to reward employees with the potential impact on the company’s capitalization table and its future fundraising efforts. By utilizing platforms like the one offered through the NewView-Carta collaboration, companies can manage these risks more effectively, ensuring that tender offers are conducted in a compliant and transparent manner.

As the industry continues to mature, the expectation for liquidity will likely become a standard demand from the workforce at high-growth companies. Whether through recurring annual tender offers or ad-hoc events triggered by specific growth milestones, the ability to provide early liquidity is rapidly becoming a cornerstone of modern startup culture. For those companies that fail to provide a path to liquidity, the risk is not just a loss of morale, but a potential drain of institutional knowledge as employees seek opportunities at firms that offer a more balanced approach to compensation and rewards.

Ultimately, the rise of the tender offer represents a maturation of the private market ecosystem. It acknowledges that employees are not just workers, but stakeholders who deserve the opportunity to realize the value of their contributions in real-time. As more companies adopt these practices, the gap between the private and public market experience will continue to narrow, providing a more stable and equitable environment for the innovators building the next generation of global technology leaders.