A tender offer is a structured window in which a buyer — the company itself or investors it invites — offers to purchase shares from existing holders at a stated price. For employees and early holders it is often the first legitimate chance to turn paper equity into money, on known terms, with the company’s blessing.
The anatomy of an offer
Every tender has the same skeleton: an offer price (and how it was set); eligibility — who may participate and which shares qualify; a cap on the total amount to be purchased; an election window, typically a few weeks, in which holders decide how much to tender; and settlement, when accepted shares are exchanged for funds.
Proration: the part that surprises people
If holders offer more shares than the buyer agreed to purchase, everyone is cut back proportionally. Tender 10,000 shares into an oversubscribed offer and you may sell 6,000. Plan around the possibility rather than the promise.
Reading the price
Tender prices are negotiated, and often sit below the last round’s preferred price — common stock, discounts for liquidity, and buyer leverage all play a role. The right comparison isn’t the headline valuation; it’s your alternative, which is usually continued illiquidity. A valuation is not a sale price covers the gap in detail.
Decisions inside the window
Holders typically weigh: how much to tender (all, some, none); taxes — gains are generally taxable in the year of sale, and option exercises layered into a tender have their own consequences worth professional advice; and information — the offer documents disclose the buyer, the price basis, and the risks. Read them; they’re short by securities standards and they’re written for exactly this decision.
Why companies run them
Recurring, well-run tenders let companies reward tenure without an IPO, reduce pressure for messy off-platform sales, and keep the cap table tidy. That’s the model our Liquidity Programs page demonstrates — and why organized liquidity beats improvised liquidity for everyone involved.
Educational only. InvestNow is a demonstration platform. This page is general information, not investment, legal, or tax advice, and not an offer or solicitation of any security. Private-market investments are speculative, illiquid, and can lose their entire value. Consult a qualified professional about your circumstances.