In an era where companies stay private longer, the promise of a distant IPO is not enough. Talented employees now expect and demand opportunities for secondary sales through tender offers. Startups that cannot provide a credible, near-term path to liquidity will lose the recruiting war for top talent.

Instead of relying on venture-led secondary sales, Column uses 25% of its annual earnings to conduct its own tender offers. This provides regular liquidity to employees, enhances retention, and aligns the team long-term without the dilution from new funding rounds.

In a powerful signal of internal optimism, Anthropic's employee stock tender offer failed to reach its full allocation. Mirroring a similar trend at OpenAI, employees are holding onto their shares—even those valued at a $380B valuation—reflecting a strong belief that the company's value will skyrocket leading up to an IPO.

Private companies like SpaceX neutralize the talent-attraction power of public company RSUs by running regular, predictable tender offers. This provides employees with consistent liquidity, making private stock nearly as compelling as its public counterpart, but without the market volatility.

The trend of allowing employees to sell shares in secondary transactions before investors get liquidity is a problem. Lior Susan argues this creates a fundamental misalignment, as historically, employees and investors realized returns at the same time. The system needs rethinking for long-duration private companies.

iCapital's CEO argues against rushing to an IPO, citing the distraction of stock volatility. To retain employees who hold equity, the private company provides periodic opportunities for them to sell a limited portion of their holdings. This balances the need for liquidity with the benefits of staying private.

At hyper-growth, mission-driven companies, employees may feel anxious about selling shares in a tender offer. The act can be perceived internally as a lack of faith in the company's ultimate long-term vision, creating social pressure to hold onto equity.

With companies staying private longer, the IPO market is less accessible for employee liquidity. Instead, corporate-organized tender offers, or internal secondaries, have become the primary mechanism for employees to cash out some of their equity before a public listing.

Top private companies like SpaceX run regular tender offers, allowing employees to sell vested stock. This provides predictable liquidity, effectively competing with the quarterly RSU payouts offered by public tech giants without the market volatility.