Startups Seek Liquidity Solutions for Employees

The trend of high-growth firms remaining private for extended periods has created a significant financial challenge for their workforce, who often hold a substantial portion of their compensation in equity. In response to this growing constraint, two prominent companies in the venture ecosystem have announced a strategic partnership designed to facilitate early share sales. The collaboration seeks to reduce the administrative burden on private firms, allowing them to offer liquidity to employees without waiting for a public listing or acquisition.

The core mechanism of this initiative is the tender offer, a financial transaction that permits employees and early investors to sell a portion of their stock at a predetermined price to an approved buyer. This method is gaining traction among late-stage companies that find the wait for an exit event increasingly long. By streamlining this process, the partnership aims to make it more accessible for a broader range of startups to implement such programs.

The alliance combines NewView's expertise in structuring secondary transactions with Carta's comprehensive equity management platform. Ravi Viswanathan, the founder and managing partner of NewView, described the initiative as a practical solution for startups looking to launch and manage liquidity programs. He stated that the goal is to make it easier for chief executive officers and their teams to consider tender offers. Viswanathan characterized early liquidity as a benefit for all parties involved, describing it as a win-win-win situation for employees, the company itself, and its investors.

Recent data from a study conducted by NewView Capital and Carta indicates that this practice is expanding rapidly. The research suggests that the number of tender offers among Series C and later-stage startups has increased threefold over the past three years. Viswanathan noted that the companies utilizing this tool are no longer restricted to the most prominent private firms, such as OpenAI, Databricks, or Anduril, but are spreading across various sectors.

To illustrate the reach of these deals, Viswanathan pointed to Hightouch, a startup focused on marketing customization. Last year, NewView led a tender offer for the company when it was seven years old. At that time, the firm was valued at $1.3 billion. This example highlights that companies do not need to be at the very peak of the valuation scale to offer such liquidity to their staff.

Despite this growth, the practice remains far from being standard for all eligible firms. The same study found that only 44 tender offers were executed in the first half of 2026. This figure represents a small fraction of the startups that are technically eligible to run such programs. Viswanathan expressed a desire to widen this group, arguing that tender offers serve as effective tools for retaining talent and boosting morale within organizations.

The partnership also addresses a shift in how companies attract talent. Viswanathan observed that the standard recruiting pitch has lost some of its previous impact. A decade ago, the prospect of reaching unicorn status was often sufficient to draw in top candidates. However, with the number of billion-dollar companies increasing, that label now carries less weight. He described a tender offer as an opportunity for a company to tell its employees that they will also receive liquidity during their tenure there.

Several recent firms have utilized tender offers to provide this benefit. Decagon, a startup in the AI customer support sector, recently held such an event. Wayve, a developer of self-driving technology, and ElevenLabs, an AI voice generator, have also conducted similar offerings. ElevenLabs is notable for having carried out two such transactions in less than a year.

Viswanathan expressed his view that the trend of longer private timelines is unlikely to reverse in the near future. He stated that companies are staying private for 12 to 15 years and that this pattern is not changing. 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 while they remain in the private sector.