My Stock Options are Vested. Why Can't I Sell Them?

The Rise of the "Decade-Old Unicorn"

For decades, the promise of working at a startup was clear: Join a high-growth company, work incredibly hard, and in 5-7 years, you'll be rewarded with a life-changing payout when the company has its Initial Public Offering (IPO).

But if you're a tech employee today, you're probably feeling a disconnect. Your company might be a "unicorn" valued at billions, your options are vested, and that 5-year mark has come and gone... yet an IPO is still nowhere in sight. Meanwhile, your sweat equity has grown to be a notable portion of your overall wealth.

You're not alone. This isn't a sign your company is failing. It's the new normal.

According to a recent PitchBook-NVCA Venture Monitor report, over 40% of today's unicorns raised their first venture capital round over a decade ago.

The 5-year sprint to an IPO has turned into a 10+ year marathon. This has created a "liquidity bottleneck" for the very people who built these companies: the employees.

Why Is This Happening? (And What Does it Mean for My Equity?)

So, why are companies staying private longer?

• More Private Capital: There's more private money available than ever before, allowing leading companies to raise massive amounts of funding in the private markets without the cost, scrutiny, and pressure of being a public company. The public market is no longer the best way to access capital.
• Market Volatility: Recent IPO performance has been mixed. Why rush to a volatile public market when you can stay private and focus on growth?
• Building a "Forever" Company: Many founders now aim to build mature, stable, profitable businesses before even considering an IPO. This is evidenced by industry-leading companies like Stripe, SpaceX, and Databricks choosing to stay private. 

This can be great for the company's long-term health, but it leaves employees holding equity that is valuable on paper but locked up in practice. It raises the most common and frustrating questions we hear:

• "When can I sell my stock options?"
• "What are my vested stock options worth if I can't sell them?"
• "How can I use my equity to buy a house / pay off debt / diversify my investments?"

This is the new "patience gap," and it's a major challenge for tech employees' financial planning.

You Don't Have to Wait: How to Sell Pre-IPO Stock

Here's the good news: A company's 10-year timeline to an IPO doesn't have to be your timeline for liquidity.

One potential solution is the private secondary market.

In simple terms, the private secondary market connects private company shareholders (like employees and early investors who want to sell their shares) with accredited or institutional investors (who want to buy into fast-growing, pre-IPO companies).

It directly solves the "liquidity bottleneck" by creating an opportunity for a stock sale without waiting for a traditional exit event like an IPO or acquisition.

Bridging the Gap: What Selling Pre-IPO Shares Means for You

Understanding you have this option is a game-changer. Here's why:

1. Unlock Your Financial Goals: This is the most important part. Selling a portion of your private shares allows you to turn that "on-paper" wealth into actual cash. You can use that money for major life goals now, not "some day" in the distant future.
2. Smart Financial Diversification: Having the vast majority of your net worth tied up in a single company's stock is incredibly risky, no matter how much you believe in the company. Selling some of your shares allows you to diversify your portfolio, reducing your personal risk while keeping a significant amount of equity for that future IPO "upside." It’s a win-win.
3. Gain Control: Waiting for an exit you can't control is stressful. The secondary market gives you control over your own financial timeline, independent of the company's IPO plans.

While there are many benefits to selling pre-IPO, it’s important to consider potential down-side factors as well. Early employees should also take account of potential tax implications and the loss of potential upside when making a decision to sell.

Your Equity, Your Timeline

The startup game has changed. The rise of the "decade-old unicorn" means that waiting 10+ years for a liquidity event is the new normal.

But this new reality has led to new solutions. You are no longer forced to wait. For employees at high-growth private companies, the secondary market is a critical tool for unlocking the value you've worked so hard to build, on a timeline that works for you.

Curious about the value of your private company shares? Learn more about how EquityZen provides liquidity for shareholders at leading private companies.