Washington, United States. More high-growth companies have been staying private for longer, a shift linked to less predictable exit windows and longer private company lifecycles. As liquidity timelines become more uncertain, partial share sales are increasingly discussed as a way to manage ownership, motivation, and access to funds.
Longer private lifecycles and delayed liquidity
In mature startups, liquidity events are often uncertain or delayed, leaving early investors, founders, and early employees holding equity for longer periods. With fewer opportunities to convert equity into cash, the lack of liquidity can create internal pressure over time.
The article says mature companies should hold open discussions about partial liquidity and structure share sales in alignment with long-term growth strategies.
Cash-out and perceptions of commitment
Traditionally, founder share sales have sometimes been viewed as a negative market signal, interpreted as reduced confidence in the company’s future. The article argues that in current growth company environments, partial liquidity does not necessarily indicate a full exit and may reflect personal financial needs or a desire to reduce financial risk.
Oleg Khusaenov, CEO and Founder of Zubr Capital, is quoted as saying, “Many entrepreneurs build and build for company growth, but paper value doesn’t mean real money in their bank accounts. We say: fix your success. Sell a small stake. Even a 2 per cent sale can equal millions in cash value.”
Timing differences between early and mature stages
The article distinguishes between early-stage startups and more mature companies, saying founder share sales early in a startup can raise concerns about commitment. It adds that share sales at later stages may be seen as part of the company’s evolution, particularly when ownership remains distributed, making partial liquidity less likely to be interpreted as a signal of departure.
How should mature private companies structure partial liquidity to support long-term growth while addressing stakeholder needs?