I’ve never dealt with a Pre-IPO company before. Are RSUs sellable on the secondary market? How does vesting work? Is it even worth considering the RSUs in the offer? Seems like paper money given the economy.
You need to look into whether the RSUs are going to be double trigger (vesting by both time plus IPO/sale) or not? If they are then they are generally not sellable. If they are sellable then you need to take into consideration tax implications while holding a less liquid security.
Figmas RSUs are double trigger
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You can sell some companies’ RSUs in secondary markets like Nasdaq Private Markets. Some companies also do tenders as part of a liquidity program. In both cases, the company usually has to agree to a transfer since you likely don’t own the shares (they’re usually double-trigger for tax purposes). And yes, they have value.
Something I don’t understand is how the shares have “value” if they cannot be sold. For all intents and purposes the company may not go public. Shouldn’t that condition receive a major discount to the share worth? For reference I’ve worked for 6 startups over 12 years. Not 1 went public. One got sold and nobody except the CEO profited. Most are sitting at series D with no intention to go public.
One could argue that discount is built in: VCs know that there is significant risk/zero liquidity for a while on their investment, so they want a discount from what the company would’ve been worth if it was actually publicly traded Whether they gauge that discount effectively is another thing of course