Startups turn to stock sales to keep employees

NewView and Carta have entered a strategic partnership designed to streamline the process of secondary share sales for employees at private companies. The collaboration seeks to address a growing concern among startup workers who receive equity compensation but lack immediate avenues to convert those shares into cash. By combining NewView’s expertise in structuring secondary transactions with Carta’s equity management platform, the two firms aim to make liquidity programs more accessible for companies that remain private for extended periods.

The central financial instrument in this arrangement is the tender offer. In this type of transaction, employees and sometimes early investors can sell a portion of their stock at a fixed price to a pre-approved buyer. This mechanism has become increasingly popular as the timeline between a company’s founding and its exit through an acquisition or public listing continues to lengthen. Late-stage startups are particularly adopting this approach to manage employee expectations and maintain morale during long private phases.

Ravi Viswanathan, the founder and managing partner of NewView, framed the partnership as a tool to help startups launch and manage these liquidity events with greater ease. He stated that the goal is to encourage chief executive officers and founders to view early liquidity positively. Viswanathan described these opportunities as a beneficial arrangement for all parties involved, calling them a win-win-win for employees, the companies themselves, and their investors.

Recent data from a joint study by NewView Capital and Carta indicates that the use of tender offers is expanding rapidly. The research projects that tender offers among Series C and later-stage startups have tripled over the last three years. Viswanathan noted that this practice is no longer restricted to the most valuable private firms, such as OpenAI, Databricks, or Anduril. Instead, a broader range of companies is now utilizing these mechanisms to provide financial flexibility to their staff.

To illustrate the trend, Viswanathan cited Hightouch, a marketing customization startup, as a specific example. Last year, NewView led a tender offer for Hightouch at a valuation of $1.3 billion. At the time of the transaction, the company was seven years old. This case highlights how companies that are not yet public can still offer significant liquidity events to their employees, providing a tangible return on their equity investments.

Despite the growth in adoption, tender offers remain a relatively rare occurrence in the broader startup ecosystem. The same research found that only 44 tender offers were executed in the first half of 2026. This number represents a small fraction of eligible startups. Viswanathan expressed a desire to widen the group of companies participating in these deals, arguing that they serve as strong retention tools and significant morale boosters for employees who might otherwise feel locked into their equity positions.

The standard recruiting pitch has also evolved in response to the changing landscape of private markets. Viswanathan observed that a decade ago, reaching unicorn status was sufficient to attract top talent. However, with the proliferation of billion-dollar companies, that label carries less weight today. He suggested that offering a tender is a way for companies to promise employees that they will also receive liquidity during their tenure, rather than waiting indefinitely for a public exit.

Several recent companies have utilized tender offers, including Decagon, an AI customer support startup, and Wayve, a developer of self-driving technology. ElevenLabs, an AI voice generator, conducted two such offerings in less than a year. These examples demonstrate that the practice is becoming a standard part of the financial toolkit for high-growth private firms looking to manage their workforce effectively.

Viswanathan believes that the trend of companies staying private for longer periods is unlikely to reverse. He noted that companies are now remaining private for 12 to 15 years, a duration that is expected to persist. To prevent a drain of talent from high-quality venture-backed firms to their public counterparts, he emphasized the need to ensure that employees have access to liquidity. This shift reflects a broader adjustment in how private companies manage human capital and financial expectations in an era of prolonged pre-IPO growth.