From IPO dreams to tender offers: the rise of the startup bonus
25 Sep 2025
3 min read
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Startups used to offer a simple bargain: take equity now, wait for an IPO and if all went well, you’d share in the upside. Liquidity came at the end, not along the way.
That model is gone.
In Silicon Valley, employee secondary sales are now routine. OpenAI staff are offloading billions of dollars’ worth of stock at a $500 billion valuation. ElevenLabs, a three-year-old voice AI company, just ran an employee sale at $6.6 billion. SpaceX has turned tender offers into a bi-annual event. What was once a red flag is now just part of the playbook.
The logic is clear: companies stay private far longer (often 10–15 years before an exit), employees won’t wait indefinitely and scarce AI talent needs more than paper promises.
The “startup bonus”
Secondaries now function as a kind of startup bonus - a periodic release valve that lets employees bank real money while still holding stock for the endgame. They deliver:
- Morale: paper wealth becomes cash.
- Retention: staff stick around even as exits drift further into the future.
- Capital efficiency: companies refresh the cap table without raising fresh equity.
It’s no surprise that US secondaries now account for nearly a third of VC deal volume, up from just 16% in 2020.
The UK angle: enter Pisces
The UK has its own answer. The Pisces platform, backed by the London Stock Exchange, is creating a regulated environment for private share trading. It’s not Silicon Valley-style tender offers, but the aim is the same: provide episodic liquidity, price discovery and a way for employees to realise value before an IPO.
Where US tech has normalised ad-hoc tender rounds, the UK may prefer a structured market model, giving employees a taste of liquidity without destabilising cap tables or tax compliance.
Old model vs new model
| Feature | Old Startup Model | New Secondary Model (US/UK) |
|---|---|---|
| Liquidity | IPO or trade sale only | Periodic tenders / Pisces events |
| Employee retention | Equity = distant hope | Equity = part-cash, part-future |
| Morale | “Wait and see” | Realised gains + ongoing upside |
| Risks | Early attrition | Complacency, signalling, tax risk |
The risks
But secondaries are no free lunch:
- Motivation drift: too much cash too soon risks employees coasting.
- Cap table complexity: repeat rounds create governance and valuation headaches.
- Market signalling: heavy insider selling may unsettle investors.
Even Elon Musk has admitted that SpaceX’s repeat tender offers need cultural ballast, liquidity alone isn’t enough to keep people “hungry.” Smaller startups without that mission-driven glue face a harder balancing act.
The new normal?
The stigma has gone. Secondaries are no longer a sign of weakness but a strategic tool for retention. For UK growth companies, platforms like Pisces could bring Silicon Valley’s playbook closer to home. The incentive question could increasingly be, not whether to allow liquidity, but how much you offer without killing the very hunger the equity incentive was designed to create.
How we help
At Burges Salmon, we advise founders, boards and investors on structuring equity incentives, secondaries, and liquidity programmes. If you’re weighing a tender offer or considering platforms like Pisces, we can help you design solutions that motivates talent, satisfies investors and keeps governance on track.