On paper, their holdings are worth a small fortune. In real life, they cannot fund a down payment on a home or their children’s education. For start-up employees who own shares, that disconnect can last for years. The secondary market promises to narrow it: selling existing shares without waiting for an IPO or the company’s acquisition. Looking ahead to September 2026, this interim liquidity represents a major issue for private-market financing. But behind the promise lie two questions: at what price can shareholders exit, and who gets permission to do so?
An exit route without new capital
In a conventional funding round, a company issues shares and receives money to grow. In a secondary transaction, a shareholder sells their shares to another investor. The money goes to the seller, not the start-up. The two transactions can nevertheless be combined: a funding round provides resources to the company while allowing some existing shareholders to cash out part of their stake.
The seller may be an employee, a founder, an angel investor or a fund that has reached the end of its investment horizon. On the other side are specialist funds, institutional investors or high-net-worth individuals. Some transactions are negotiated individually; others take the form of a company-organized program with a common price, an overall transaction limit and shared eligibility criteria.
Why the issue has become central
The downturn in technology markets from 2022 onward brought back an obvious truth forgotten during the euphoria: a private valuation is not a promise of payment. IPOs became less frequent, while buyers became more selective. For venture capital funds, longer waits for exits also make it harder to return money to their own investors.
Actual transactions have illustrated this release-valve function. In February 2024, Stripe announced an agreement allowing current and former employees to sell shares at a valuation of $65 billion. The payments group could thus offer partial liquidity without going public. This precedent demonstrates the mechanism’s appeal, but does not mean that every start-up can attract that level of demand.
Looking ahead to September 2026, a reasonable expectation is that secondary transactions will become more integrated into equity management, rather than being reserved for emergencies. This is a forward-looking analysis, based on trends observed through 2024, not a review of transactions in 2026. Its development will depend in particular on buyer appetite and a sustained reopening of exit markets.
The discount: the price of waiting
The sticking point often comes down to one sentence: “My company was valued more highly at the last funding round.” Yet the price quoted during a funding round does not automatically apply to every share. Professional investors may hold securities carrying preferential rights, particularly in the event of a sale or liquidation. Employees frequently own common shares, which offer fewer economic protections.
A secondary buyer also assesses a company using sometimes limited information, accepts that reselling may be difficult and does not know how long their money will remain tied up. They may therefore demand a discount. This can reflect genuine risk, deteriorating prospects or simply a balance of power that favors whoever has cash available. There is no universal percentage that distinguishes a good deal from a sale at a sacrifice.
Comparing the proposed price solely with the latest valuation can therefore be misleading. The share class, its associated rights, debt, operating prospects and exit terms all need to be examined. The price of a small, isolated transaction does not necessarily establish a new valuation for the entire company. But repeated steep discounts become hard to ignore.
Employees: tightly constrained freedom
Owning shares does not mean being able to sell them to anyone you choose. Articles of association and shareholder agreements may impose approval requirements, preemption rights or transfer restrictions. Companies generally want to control who their shareholders are and prevent sensitive information from circulating unchecked. A platform that connects sellers and buyers does not remove these constraints.
Another common source of confusion in France is that BSPCE employee share subscription warrants are not yet freely transferable shares. Holders must, in particular, check the exercise conditions and, where necessary, finance their conversion into shares before a sale. Tax treatment depends on the scheme and the beneficiary’s circumstances. The headline amount alone therefore never tells holders how much will be available in their bank account.
Imagine an employee who has been with the company for six years and wants to sell a portion of her shares to buy a home. Her need does not necessarily signal a lack of confidence in the company. A well-designed program allows her to diversify her assets while retaining a meaningful stake. By contrast, imposing an indefinite wait concentrates her salary, her job and her savings in the same risk.
Fairness depends on the terms
The main conflict arises when founders cash out substantial sums while their teams remain locked in. Differences may be justified, but they must be explainable. Even a transaction open to employees can cause frustration if former colleagues are excluded, if the minimum tenure requirement seems arbitrary or if only the best-informed know how to participate.
Three parameters should be made clear before any selling window:
- Access: eligible participants, treatment of former employees and minimum tenure requirements.
- Volume: the proportion of shares that can be sold and the allocation rule if requests exceed the overall transaction limit.
- Information: the pricing method, fees, timetable and the risks of forgoing future gains.
Fairness does not necessarily mean identical terms for all financial instruments. Above all, it requires everyone to understand what they are selling and why the terms differ. Accessible information, time to consider the decision and the option of consulting an independent adviser reduce the asymmetry between an employee who sells only occasionally and a professional buyer.
A governance tool, not a miracle cure
For executives, organizing partial liquidity can support retention and make employee share ownership more credible. But the process requires legal, financial and human resources. Buyers must be selected, sufficient information shared and the chosen price explained without turning every transaction into a referendum on the company’s value.
The secondary market is no substitute for a sound business model or sufficient cash reserves. A company can facilitate share sales and still face an urgent need for funding. The challenge is to avoid confusing shareholder comfort with the health of the business.
What next? If the market becomes more structured after September 2026, its progress will be measured less by transaction values than by the quality of its rules. Predictable selling windows, transparent criteria and clearer explanations of rights could make secondary transactions a routine tool for sharing value. Otherwise, the “exit before the exit” will remain primarily available to those who already have the best access to information and power.
