Let your employees cash out

Startups are taking longer than ever to exit. The time taken to reach a merger, acquisition or initial public offering for venture capital-backed technology companies has risen dramatically from a median period of seven and half years in 2006 to almost 11 years in 2018.

That means that founders and employees can wait over a decade for access to liquidity. Add Covid-19 into the mix and that wait is only going to get longer.

The question is, can, or even should, businesses expect workers to wait that long when their companies perform well? Staff could be cash-poor, but millionaires on paper — and while that might be a strong motivator at the start of the journey, 10 years down the line, there might be a different perspective. Major life events and changing priorities mean that people could well want to access liquidity ahead of the business’ schedule. But is that possible? It is through secondary share selling — finding a buyer for your shares in the company.

Read more: Sifted

Source: Sifted