Hatchet News

I've always thought that it's unfortunate that employee equity can only be liquidated once you reach one of the 'big' exit events (i.e., exit or IPO) -- especially because this is tech and it can take YEARS to reach one of those events but most hires only stick around for a couple years.

But I had a thought this morning:

When a startup does a fund-raising round, why don't employees get a chance to sell some of their vested equity to the new investors?

I'm guessing that the employee shares are probably of a less-desirable class regarding voting rights, but it feels like somebody holding a pile a pre-A equity shares would still be valuable to an investor hopping in on a C-round.