Why Today's Secondary Sales Look Nothing Like 2021's Cash-Out Frenzy
Secondary sales—the private transactions allowing stakeholders to sell shares before an IPO—are making a quiet comeback. But unlike the founder-dominated liquidity events of the 2021 bubble, today's tender offers prioritize rank-and-file employees at fast-growing startups. Companies like Clay, Linear, and ElevenLabs recently authorized multi-million dollar liquidity programs where staff—not just founders—can convert stock options into cash. This shift reflects a maturing market where retaining top talent matters more than premature founder exits. For employees weighing equity-heavy compensation packages, these moves signal a new era of shared upside in an otherwise cautious funding environment.
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The New Playbook: Liquidity as a Retention Lever
In May 2025, AI sales automation platform Clay broke pattern by offering most employees a chance to sell shares at a $1.5 billion valuation—just months after its Series B round. Tender offers at this stage were rare then. But Clay's move sparked a trend. Six-year-old project management tool Linear followed with a tender offer matching its $1.25 billion Series C valuation. Then came ElevenLabs, the three-year-old AI voice synthesis startup, which authorized a $100 million secondary sale for staff at a staggering $6.6 billion valuation—double its previous mark.
What makes these transactions notable isn't just the speed of valuation growth. It's the deliberate inclusion of engineers, designers, and early hires who accepted below-market salaries for equity. When Clay recently announced another tender offer at a $5 billion valuation—up 60% from August—employees who'd waited patiently finally saw tangible returns on their risk. This isn't a fire sale; it's a calibrated reward system.
Valuations Soar, But With Discipline
Clay's journey illustrates the new normal. The eight-year-old startup tripled its annual recurring revenue to $100 million in a single year while deliberately pacing its fundraising. Its secondary sales aligned with clear business milestones—not speculative hype. Similarly, ElevenLabs' $6.6 billion valuation reflects real product-market fit in the booming AI audio space, not empty promises.
This contrasts sharply with 2021's "growth at all costs" mentality. Back then, sky-high valuations often lacked revenue foundations. Today's tender offers emerge from companies demonstrating genuine traction: predictable ARR growth, capital efficiency, and clear paths to profitability. Investors now demand these fundamentals before approving liquidity events—especially those benefiting employees. The result? Secondary sales feel less like exits and more like validation moments for teams that built something durable.
The Ghost of 2021: When Founders Cashed Out Alone
To appreciate today's shift, recall Hopin's infamous collapse. In 2021, founder Johnny Boufarhat sold $195 million of his shares when the virtual events platform hit a $7.7 billion valuation. Two years later, Hopin's assets sold for pennies on the dollar. Employees holding illiquid options watched their paper wealth evaporate while the founder walked away wealthy.
That era's secondary sales overwhelmingly favored founders and early investors. Tender offers were structured as insider perks—not team-wide benefits. The optics were terrible, and the fallout reshaped investor expectations. Today, venture capitalists actively discourage founder-heavy liquidity before sustainable unit economics exist. As one growth-stage partner told me off-record: "If your first tender offer excludes the people shipping code daily, you've already lost the culture war."
Why Investors Now Champion Employee Liquidity
The calculus has flipped. In 2026's competitive talent market, losing a senior engineer to a public company's RSU package can derail a startup's roadmap. Secondary sales solve this quietly. When employees cash out 10–15% of their equity, they gain financial breathing room without leaving. They're less distracted by personal liquidity needs and more focused on building.
Investors recognize this. Approving modest, broad-based tender offers now prevents catastrophic attrition later. It also signals confidence: "We believe this valuation is real because we're letting our team test that belief with actual cash." Contrast this with 2021's founder-only sales, which often telegraphed quiet desperation beneath the hype. Today's employee-inclusive approach builds trust internally and externally—a rare win-win in venture capital.
The Retention Math Behind the Moves
Consider an engineer who joined Clay in 2022 with a $150,000 salary and $400,000 in option value (on paper). For years, that equity felt theoretical. But after Clay's first tender offer, she sold enough shares for a down payment on a home—without quitting. She's now financially anchored to the company's success. She didn't need to jump to Google for liquidity.
This isn't charity. It's strategic capital allocation. Startups spending $200,000 to replace a departed engineer lose more than they "spend" on a tender offer. Secondary sales function as invisible retention bonuses—more meaningful than spot bonuses because they validate the core promise of startup compensation: shared ownership. When employees see peers converting options to cash, faith in the equity model gets restored. That psychological shift is priceless during fundraising winters.
Navigating the Risks: Not All Secondaries Are Created Equal
Employee-friendly tender offers aren't risk-free. Overly generous liquidity can create complacency or signal that insiders doubt future upside. Smart companies cap participation—typically 10–20% of vested shares—and tie offers to performance milestones. Clay's second tender came only after tripling ARR; ElevenLabs' followed explosive enterprise adoption.
Timing matters too. Secondary sales too close to a down round can devastate morale. But when aligned with genuine growth inflection points, they reinforce momentum. The key distinction from 2021? Today's transactions feel earned, not extracted. Employees receive liquidity as teammates—not afterthoughts once founders have secured their own exits.
What This Means for Startup Talent in 2026
If you're evaluating an offer from a late-stage startup, ask directly: "Does the company plan employee tender offers before IPO?" A thoughtful answer signals maturity. A defensive one suggests outdated thinking. The best founders now view liquidity as infrastructure—like healthcare or professional development—not a privilege reserved for the C-suite.
This trend also reshapes negotiation dynamics. Candidates increasingly request "liquidity clauses" guaranteeing access to future tender offers. Forward-thinking HR teams bake these into offer letters, recognizing that equity without a path to liquidity is a broken promise. As one talent lead at a Series C AI startup admitted: "We'd rather facilitate a small cash-out now than lose someone to Meta's RSUs next quarter."
Normalizing Shared Upside
Secondary sales won't replace IPOs or acquisitions as ultimate liquidity events. But they're evolving into standard tools for healthy scaling companies—much like refresh grants or performance bonuses. The shift from founder windfalls to employee retention reflects venture capital's hard-won lessons from the 2021 crash.
Sustainable growth requires aligned incentives. When employees share in interim wins, they stay invested through volatility. That resilience matters more than ever in 2026's selective funding climate. The startups thriving today aren't those chasing hype cycles—they're the ones building cultures where talent feels valued long before the exit headlines hit.
Secondary sales, reimagined as retention engines rather than escape hatches, might just be the quiet innovation keeping the next generation of category-defining companies intact. And for the engineers, designers, and product leaders betting their careers on hard problems? Finally, a liquidity path that doesn't require waiting a decade—or watching founders cash out alone.
