Tender offer

A tender offer is an invitation to existing shareholders to sell a specified number of shares at a fixed price. At private tech companies, tender offers are typically organized alongside a new financing round and run by an investment bank or the company itself. They may be limited to vested RSUs or exercised shares, held for a minimum period (often one year), and capped at a percentage of each holder’s position. Prices are usually set at a discount to the new preferred round to reflect common vs. preferred differences.

Example: a late-stage company raises a $600 million round at $40 per preferred share and runs a tender offer for common at $32. Employees with vested exercised shares held longer than a year may sell up to 25% of their position at $32. A senior engineer with 30,000 eligible shares sells 7,500 for $240,000.

Common mistake: assuming a tender counts as a change of control for acceleration. It almost never does. Unvested equity continues to vest on the existing schedule.

Tender offers matter as the primary pre-IPO liquidity path, and they trigger QSBS five-year clock decisions that should not be taken lightly.