Fundraising
Tender Offer
Quick definition
Structured opportunity for existing shareholders (often employees) to sell shares to incoming investors or the company.
A tender offer lets employees and early investors sell some of their shares to a buyer (the company itself, a secondary-market investor, or the lead of a new round) on standardized terms. Common at Series B+ when valuations are high but no liquidity exists. Tax-efficient if structured as QSBS-eligible secondary. Requires careful 409A coordination because the tender price typically becomes the new fair-market value.
Related fundraising terms
SAFE (Simple Agreement for Future Equity)
Convertible instrument commonly used for early-stage rounds.
409A Valuation
Independent valuation of common stock used to set option strike prices.
Cap Table
A record of all ownership interests in your company.
Pro Rata Right
An investor's right to maintain their ownership % in future rounds.
Frequently asked questions
- What is Tender Offer?
- A tender offer lets employees and early investors sell some of their shares to a buyer (the company itself, a secondary-market investor, or the lead of a new round) on standardized terms. Common at Series B+ when valuations are high but no liquidity exists. Tax-efficient if structured as QSBS-eligible secondary. Requires careful 409A coordination because the tender price typically becomes the new fair-market value.
- Why is Tender Offer important for startups?
- Tender Offer is a fundraising concept that matters for startup founders because it directly affects fundraising readiness, financial decision-making, or operational discipline at the stage where mistakes are expensive to undo. Founders who understand it have a meaningfully easier time in diligence, board meetings, and investor conversations.
- What category does Tender Offer belong to?
- Tender Offer is a Fundraising term in the StartupCFO finance glossary — alongside other fundraising concepts that founders, CFOs, and accountants use in daily startup operations and reporting.
- Where can I learn more about Tender Offer?
- Beyond this definition, see the related fundraising terms below, or explore StartupCFO's insights and tools that put Tender Offer in context. For specific situations, talk to a fractional CFO who can walk through your numbers.
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