How To Sell Unlisted Shares: Complete Guide for Employees and Investors

Last Updated: January 2026

Who Can Sell Unlisted Shares?

Selling unlisted shares in private companies is fundamentally different from selling public stock. You can't simply log into a brokerage account and click "sell"—private share sales require company approval, navigating transfer restrictions, finding qualified buyers, and completing complex legal documentation.

The most common sellers of unlisted shares include:

• Current employees who exercised stock options or received RSUs and want liquidity before an IPO
• Former employees who exercised options before or after leaving the company
• Early investors (angels, seed investors) seeking to realize gains or rebalance portfolios
• Founders needing liquidity for personal financial needs (though this is heavily restricted)
• Venture capital funds returning capital to LPs through secondary sales
• Estate holders liquidating shares inherited from deceased shareholders

This guide focuses primarily on employees and early-stage investors, who comprise the majority of secondary market sellers and face the most complexity navigating the process.

Understanding Your Shares

Before attempting to sell, you need to understand exactly what you own. Not all private company equity is created equal, and the type of shares you hold significantly impacts your ability to sell and their value to buyers.

Common Stock vs. Preferred Stock

Common Stock

• What employees typically receive through stock options or RSUs
• Last in line for liquidation (paid after all preferred shareholders)
• Usually has voting rights
• Subject to vesting schedules
• More liquid in secondary markets (most buyers want common)

Preferred Stock

• What investors receive in funding rounds (Series A, B, C, etc.)
• Liquidation preference (paid before common shareholders)
• May have special rights (board seats, anti-dilution, participation)
• Different series have different rights and preferences
• Less liquid in secondary markets (complex rights make valuation difficult)

For detailed explanation of share classes and rights, see our Private Company Valuation Guide.

Vested vs. Unvested Shares

Vested Shares

• You have completed the vesting requirements and fully own these shares
• Can be sold (subject to company approval and transfer restrictions)
• Remain yours even if you leave the company
• May be subject to repurchase rights for a period after vesting

Unvested Shares

• You have not completed vesting requirements yet
• Cannot be sold—you don't legally own them yet
• Will be forfeited if you leave before they vest
• Some companies allow early exercise (buying unvested options), creating "unvested but exercised" shares that are still subject to vesting

Learn more about vesting in our Employee Stock Options Guide.

Exercised Options vs. Unexercised Options

Exercised Options = Shares You Own

• You paid the exercise price and now own actual shares
• These shares can be sold (if vested and company approves)
• You've already paid taxes on exercise (for ISOs, AMT may apply)
• Value increases/decreases with company valuation

Unexercised Options = Right to Buy Shares

• You hold the option to purchase shares at the strike price
• Cannot be sold in most cases (options themselves are not transferable)
• Must exercise (buy the shares) before you can sell
• Options expire—typically 90 days after leaving company, or 10 years from grant

Restricted Stock Units (RSUs)

RSUs are increasingly common at later-stage startups. Key differences for sellers:

• You don't pay to exercise RSUs—shares are simply granted when they vest
• Taxes are withheld at vesting (company withholds shares to cover taxes)
• Once vested, RSUs become common stock you own and can potentially sell
• RSUs typically have "double trigger" vesting at late-stage companies (time + liquidity event)

Finding Your Documentation

Gather these documents to understand exactly what you own:

• Stock option grant agreements: Shows number of options, strike price, vesting schedule
• RSU grant agreements: Shows number of RSUs and vesting schedule
• Stock certificates or confirmation: Proof of exercised shares you own
• Cap table access: Some companies use Carta, Pulley, or other platforms where you can view your holdings
• 83(b) election forms: If you filed 83(b) election for early exercise
• Shareholder agreement: Contains transfer restrictions and ROFR provisions

When Can You Sell?

Timing restrictions are perhaps the most significant barrier to selling private shares. Multiple factors determine when (if ever) you can execute a sale.

Vesting Requirements

You must wait until shares vest before selling. Standard vesting schedules:

• 4-year vesting with 1-year cliff: Most common (0% vests for first year, then 25% at 1-year mark, monthly vesting thereafter)
• Monthly vesting: 1/48th vests each month over 4 years
• Milestone vesting: Vests upon achieving specific performance goals
• Accelerated vesting: Full or partial acceleration upon acquisition or IPO

Until shares vest, you legally don't own them and cannot sell.

Company-Sponsored Tender Offers

Tender offers are company-organized liquidity events where the company (or approved buyer) offers to purchase shares from employees and early investors at a set price.

How They Work:

• Company announces tender offer with specific terms (price, eligibility, timing)
• Eligible shareholders can elect to sell some or all of their shares
• Company or outside investor purchases shares directly
• Process typically runs 30-60 days from announcement to closing

Tender Offer Eligibility:

• Often limited to employees with certain tenure (2+ years common)
• May exclude founders and executives
• Sometimes limited to certain dollar amounts per person
• Early investors may or may not be included

Advantages:

• Company-sanctioned and streamlined process
• No need to find buyers or navigate ROFR (already approved)
• Clear pricing and timeline
• Legal costs typically covered by company

Disadvantages:

• Must wait for company to offer (no control over timing)
• May not be eligible based on criteria
• Price is set—no negotiation
• Limited amount you can sell (companies often cap participation)

Secondary Market Windows

Some companies establish formal secondary market windows—specific periods when employees can sell shares through approved platforms or to approved buyers.

How They Work:

• Company announces window (typically 30-90 days, once or twice per year)
• Company partners with specific platform(s) like Forge, EquityZen, or Carta
• Employees can list shares on approved platform during window
• Company pre-approves buyers who meet certain criteria
• Transactions close within the window period

Examples of companies with formal windows: Stripe, SpaceX, and many other late-stage unicorns have implemented periodic secondary windows.

Lock-Up Periods and Transfer Restrictions

Various restrictions may prevent sales even if shares are vested:

Post-Exercise Lock-Ups:

• Some companies impose 6-12 month holds after exercising options before you can sell
• Prevents immediate exercise-and-flip transactions
• Review your option agreement for these provisions

Right of First Refusal (ROFR):

• Company has right to purchase shares before you can sell to third party
• Doesn't prevent selling, but company can block by exercising ROFR
• Detailed in ROFR section below

Board Approval Requirements:

• Many shareholder agreements require board approval for any transfer
• Gives company veto power over sales
• Companies may have criteria for approval (buyer qualifications, price minimums)

Founder/Executive Restrictions:

• Founders often have multi-year lockups preventing any secondary sales
• Executives may be prohibited from selling to maintain alignment
• These restrictions protect investors by ensuring key people remain committed

Option Expiration Deadlines

If you have unexercised options, expiration creates urgency:

• 90-day post-termination expiration: Most common—options expire 90 days after leaving company
• 10-year expiration: Options granted expire 10 years from grant date (ISOs) or no limit (NSOs)
• Extended exercise windows: Some companies allow 5-7 years post-termination

If you're planning to leave your company, consider whether to exercise options before leaving, and whether you'll be able to sell those shares to recoup the exercise cost.

Selling Methods

There are four primary methods to sell private company shares, each with distinct processes, advantages, and challenges.

Method 1: Company Tender Offers

Best for: Employees of companies that offer tender programs

Covered extensively above. This is the simplest path when available—the company handles logistics, approvals, and documentation. If your company announces a tender offer and you're eligible, this is usually your best option for clean, efficient liquidity.

Typical process: Receive tender offer notice → Review terms → Elect to participate → Sign documents → Receive payment (30-60 days total)

Method 2: Secondary Market Platforms

Best for: Proactive sales outside tender offers

Platforms like Forge Global, EquityZen, Hiive, and others connect sellers with accredited investor buyers. These marketplaces have transformed private share liquidity by creating standardized processes and deep buyer pools.

How Platform Sales Work:

1. Seller lists shares: Provide information on your holdings and desired price
2. Platform sources buyers: Platform presents your opportunity to vetted accredited investors
3. Negotiate terms: Discuss price, timing, and structure with interested buyers
4. Execute ROFR: Platform helps navigate company's right of first refusal
5. Legal documentation: Platform facilitates stock purchase agreements and transfer docs
6. Closing: Payment transferred, shares transferred to buyer

Platform Fees for Sellers:

• EquityZen: 5% of transaction value
• Hiive: 3% of transaction value
• Forge Global: 3-5% of transaction value
• Rainmaker: 4% of transaction value
• Zanbato: 2-4% of transaction value

Timeline: 60-120 days from listing to closing (includes ROFR period)

See our Secondary Market Platforms Comparison for detailed analysis of each platform.

Method 3: Direct Sales to Known Buyers

Best for: Sellers with existing relationships to qualified buyers

You can attempt to sell directly to:

• Existing investors in the company (VCs already on cap table)
• Friends/family who are accredited investors
• Angel investors in your network
• Other employees looking to increase their stake

Advantages:

• No platform fees (save 3-5%)
• Direct negotiation on price and terms
• Potentially faster process
• May be easier to get company approval for known buyers

Challenges:

• Must find buyer yourself (significant time investment)
• Need to hire attorney for documentation ($5K-$15K)
• Must navigate ROFR process independently
• No platform support or expertise
• Buyer must be accredited and pass company vetting

Method 4: Broker-Assisted Sales

Best for: Large blocks or complex situations

Specialized brokers and investment banks facilitate private share sales for a fee. This is most common for:

• Large blocks ($500K+ transaction value)
• Institutional sellers (VC funds exiting positions)
• Complex situations (estate sales, divorce settlements)
• Confidential transactions requiring discretion

Brokers include: Rainmaker Securities (also operates platform), independent broker-dealers specializing in private securities

Fees: 3-6% of transaction value, sometimes higher for smaller deals

Step-by-Step Selling Process (Platform Sale)

Here's a detailed walkthrough of selling through a secondary market platform, the most common method for employee and investor sellers:

Step 1: Assess Your Eligibility and Holdings

What you own:

• Confirm your shares are vested and exercised (or RSUs are vested)
• Determine exact number of shares you can sell
• Identify share class (Common Class A/B, Preferred Series X)

Review restrictions:

• Read your stock option agreement, RSU agreement, and shareholder agreement
• Look for transfer restrictions, lock-up periods, ROFR provisions
• Check if your company has formal secondary policies or requires board approval

Legal/tax consultation:

• Consider consulting attorney on interpretation of agreements
• Consult tax advisor on tax implications (more details in Costs section)

Step 2: Choose a Platform

Based on transaction size and preferences:

• Smaller transactions ($10K-$100K): EquityZen, Hiive
• Mid-size ($100K-$500K): Forge, Hiive, Rainmaker
• Large ($500K+): Forge, Zanbato, broker-dealers

Many sellers create accounts on 2-3 platforms to compare interest and pricing.

Step 3: List Your Shares

Information required:

• Company name and details
• Number of shares and share class
• Documentation proving ownership (stock certificates, cap table screenshot)
• Desired price or pricing expectations
• Timeline and any urgency

Pricing guidance:

• Platform will provide recent transaction data if available
• Prices typically 20-40% below last funding round valuation (more in Pricing section)
• You can list at specific price or field offers

Step 4: Platform Markets to Buyers

The platform will:

• Present your opportunity to their investor network
• Provide company information to interested buyers
• Facilitate initial discussions and negotiations
• Screen buyers for accreditation and qualification

Timeline: Finding a buyer takes 2-6 weeks depending on company desirability and pricing

Step 5: Negotiate Terms and Execute LOI

Once buyer interest emerges:

• Price negotiation: Finalize price per share
• Allocation negotiation: Determine exact number of shares (if multiple buyers, you may need to allocate)
• Timeline: Agree on target closing date
• Contingencies: Subject to ROFR, due diligence, company approval

Sign a non-binding Letter of Intent (LOI) or Term Sheet outlining agreed terms.

Step 6: Navigate Right of First Refusal (ROFR)

This is the critical step where many deals fail. Detailed explanation in ROFR section.

Process:

1. Platform or seller notifies company of intent to sell at negotiated price
2. Company has defined period (typically 30 days) to respond
3. Company can: (a) exercise ROFR and buy shares themselves, (b) waive ROFR and approve sale to buyer, (c) reject sale entirely
4. If approved, proceed to closing; if exercised or rejected, deal terminates

Step 7: Complete Due Diligence and Documentation

If ROFR is waived/approved:

• Stock Purchase Agreement (SPA): Legal contract between you and buyer
• Seller representations and warranties: You confirm you own shares, have authority to sell, shares are free of encumbrances
• Buyer confirmation: Buyer confirms accredited status and qualifications
• Company approval documentation: Written confirmation from company approving transfer

Platform typically coordinates documentation, but you should have attorney review.

Step 8: Closing and Payment

Closing steps:

• Buyer wires funds to escrow or platform
• You execute transfer documents and stock assignment
• Company updates cap table to reflect new owner
• Platform releases funds to you (minus fees)

Timing: Closing occurs 1-5 business days after all docs signed

Payment method: Wire transfer to your bank account

Step 9: Tax Reporting

• Platform or buyer will issue IRS Form 1099-B reporting sale
• You must report capital gain/loss on tax return
• Keep all documentation for tax records

Understanding Right of First Refusal (ROFR)

The Right of First Refusal (ROFR) is the single biggest hurdle in secondary sales. It gives the company (and sometimes existing investors) the right to purchase your shares before you can sell to a third party.

How ROFR Works

Legal framework:

• ROFR is embedded in your shareholder agreement or stock option agreement
• When you find a buyer and agree on terms, you must offer those same terms to the company first
• Company has a defined response period (15-45 days, typically 30 days) to decide

Company's three options:

1. Exercise ROFR: Company (or designated party) buys your shares at the price you negotiated with third party buyer
2. Waive ROFR and approve: Company declines to buy but approves your sale to the third party
3. Reject sale: Company declines to buy AND refuses to approve transfer (deal dies)

Why Companies Exercise ROFR

Companies may buy your shares (exercise ROFR) for several reasons:

• Control shareholder base: Prevent unknown or undesirable investors from joining cap table
• Reduce share count: Buy back shares to consolidate ownership
• Block sales during sensitive periods: Prevent sales before fundraising or acquisition negotiations
• Price concerns: Buying shares at current price may be attractive investment for company
• Investor relations: Signal to other shareholders that company doesn't want secondary sales

Why Companies Waive ROFR

Companies approve sales (waive ROFR) when:

• Buyer is qualified: Buyer is accredited, sophisticated, and acceptable to company
• Reasonable price: Sale price reflects fair market value, not discount that could harm company
• Employee liquidity priority: Company wants to reward employees with liquidity
• De minimis impact: Small sale doesn't affect cap table materially
• Formal secondary program: Sale occurs during approved secondary window

Why Companies Reject Sales

Companies block sales (reject without exercising ROFR) when:

• Unqualified buyer: Buyer doesn't meet company's investor standards
• Bad timing: Company is in fundraising, acquisition talks, or other sensitive situations
• Valuation concerns: Sale price is too low and would set problematic precedent
• Policy reasons: Company has blanket prohibition on secondary sales
• Competitive concerns: Buyer might be competitor or strategic threat

ROFR Timeline and Process

Typical timeline:

• Day 0: Seller and buyer agree on terms, sign LOI
• Day 1-3: Seller (or platform) prepares ROFR notice with all terms
• Day 3: ROFR notice delivered to company (email and/or registered mail)
• Day 3-33: Company has 30 days to respond (countdown starts)
• Day 33: Company responds with decision
• If approved: Proceed to closing (7-21 days)
• If exercised: Company buys shares at same terms as buyer offered
• If rejected: Deal terminates; seller must start over or abandon sale

Strategic Considerations for ROFR

Improving approval odds:

• Choose qualified buyers: Work with established platforms providing vetted accredited investors
• Price appropriately: Don't underprice significantly below recent funding round
• Timing: Avoid periods around fundraising, earnings releases, or major announcements
• Communication: Some sellers inform company before initiating sale to gauge receptiveness
• Respect limits: If company has stated secondary sale policies, follow them

Dealing with rejection:

• Ask company for feedback on why sale was rejected
• Inquire about future secondary windows or tender offers
• Consider whether different buyer or different timing might be approved
• Understand company may have legitimate reasons not visible to you

Pricing Your Shares

Pricing unlisted shares is part art, part science. Unlike public stocks with real-time market prices, private share pricing requires understanding multiple valuation metrics and market dynamics.

Key Valuation Reference Points

1. Most Recent Funding Round (Preferred Price)

• Price per share investors paid in last funding round (Series A, B, C, etc.)
• Example: Series C at $15.00 per preferred share
• This is for preferred stock with liquidation preferences and special rights
• Common stock (what employees own) typically trades at 20-40% discount to preferred

2. 409A Valuation (Common Stock Price)

• IRS-compliant valuation determining fair market value of common stock
• Used to set strike price for new stock options
• Typically 40-60% of preferred price at early stage, narrowing as company matures
• Example: If preferred is $15, 409A might value common at $8-$10
• Updated annually or after material events

See our 409A Valuation Guide for detailed explanation.

3. Recent Secondary Market Transactions

• Most relevant data: actual prices paid in recent secondary sales of same company
• Platforms like Forge provide historical transaction data
• Secondary prices typically 20-40% below last funding round for common stock
• Reflects illiquidity discount, lack of preferred rights, and market demand

4. Company's Implied Valuation

• If last funding was Series C at $1B valuation (post-money), understand your percentage ownership
• Example: 10,000 shares out of 10,000,000 total = 0.1% = $1M worth at funding valuation
• Apply appropriate discount for common vs. preferred (20-40%)
• Your 10,000 shares might be worth $600K-$800K in secondary market

Pricing Methodologies

Method 1: Percentage of Preferred Price

Most common approach—price common stock as percentage of most recent preferred round:

• 70-80% of preferred: Late-stage, near-IPO companies (liquidation preference less meaningful)
• 60-70% of preferred: Growth-stage companies with clear path to liquidity
• 50-60% of preferred: Earlier-stage companies with uncertainty
• 40-50% of preferred: Early-stage or distressed situations

Example calculation:

• Most recent funding: Series D at $20.00 per preferred share
• Your common stock: 5,000 shares
• Pricing target: 65% of preferred = $13.00 per common share
• Total value: 5,000 × $13.00 = $65,000

Method 2: Multiple of 409A Valuation

Price based on multiple of most recent 409A common stock valuation:

• 1.0-1.2x 409A: Conservative pricing, higher approval odds
• 1.2-1.5x 409A: Market pricing for quality companies
• 1.5-2.0x 409A: Premium pricing for hot companies (Stripe, SpaceX-tier)
• Below 1.0x 409A: Distressed or unwanted companies

Example calculation:

• Most recent 409A: $8.50 per common share
• Target multiple: 1.3x (strong company, good demand)
• Your asking price: $8.50 × 1.3 = $11.05 per share

Method 3: Recent Comparable Secondary Sales

Use actual transaction data from recent secondary sales:

• Check platform data (Forge Data, EquityZen transaction history)
• Ask platform advisors for recent clearing prices
• Network with other shareholders to learn recent sale prices
• Use comparable sales as anchor for your pricing

Factors Affecting Pricing

Company-Specific Factors:

• Path to liquidity: Near-term IPO prospects command premium pricing
• Financial performance: Strong revenue growth supports higher valuations
• Fundraising momentum: Recent funding at up round (higher valuation) lifts secondary prices
• Market position: Market leaders with competitive moats trade at premiums
• Liquidity history: Companies with regular tender offers have more liquid secondary markets

Market Dynamics:

• Buyer demand: Hot companies (AI, fintech leaders) see strong buyer interest and higher prices
• Supply/demand balance: Scarce supply drives prices up; flooding market drives prices down
• Market sentiment: Bull markets lift all prices; downturns depress valuations
• Comparable public companies: Public market multiples influence private valuations

Transaction-Specific Factors:

• Urgency: Need to sell quickly forces lower pricing
• Size: Large blocks may require discount due to limited buyer pool
• Holding period: Buyers factor in years until liquidity event

Pricing Strategy

For sellers prioritizing speed:

• Price at lower end of range (60-65% of preferred, 1.0-1.2x 409A)
• Attract more buyers and expedite process
• Higher probability of company approving reasonably priced sale

For sellers prioritizing maximum value:

• Price at higher end or above (70-80% of preferred, 1.3-1.5x 409A)
• Wait for right buyer willing to pay premium
• May take longer and risk company rejection if overpriced

Fielding offers approach:

• List shares without firm price ("accepting offers")
• Review all offers and select best combination of price and terms
• Lets market determine price rather than anchoring

Costs of Selling

Selling private shares involves multiple costs that reduce your net proceeds. Understanding these costs helps you evaluate whether selling makes financial sense.

Platform Fees

Secondary platforms charge sellers transaction fees:

• EquityZen: 5% of sale price
• Forge Global: 3-5% (negotiable for large transactions)
• Hiive: 3%
• Rainmaker: 4%
• Zanbato: 2-4%

Example: Selling $100,000 worth of shares at 4% fee = $4,000 fee, netting $96,000

Legal Fees

Legal costs vary by transaction complexity and method:

Platform-facilitated sales:

• Platform provides standard documents (included in platform fee)
• Optional attorney review: $1,000-$3,000
• Recommended for large transactions or complex situations

Direct sales (without platform):

• Must hire attorney to draft Stock Purchase Agreement: $5,000-$15,000
• Additional costs for negotiations and revisions
• Escrow and transfer documentation

Tax Implications

Taxes are typically the largest cost of selling. Tax treatment depends on several factors:

Capital Gains Tax (Most Common)

If you're selling shares you've held for more than one year:

• Federal long-term capital gains tax: 0%, 15%, or 20% depending on income
• Net Investment Income Tax (NIIT): Additional 3.8% for high earners (over $200K single, $250K joint)
• State capital gains tax: 0-13.3% depending on state (CA highest at 13.3%)
• Total effective rate: 15-37% depending on circumstances

Short-term capital gains:

• If you've held shares less than one year, taxed as ordinary income
• Federal rates: 10-37% depending on tax bracket
• Plus state taxes
• Generally want to avoid selling within first year

Calculating your gain:

• Sale price: Amount buyer pays per share
• Cost basis: What you paid for shares (exercise price for options, $0 for RSUs)
• Capital gain = Sale price - Cost basis

Example tax calculation:

• Sale price: $100,000
• Cost basis: $10,000 (you exercised 10,000 options at $1 strike price)
• Capital gain: $90,000
• Federal long-term capital gains (20% bracket): $18,000
• NIIT (3.8%): $3,420
• State tax (CA 13.3%): $11,970
• Total taxes: $33,390
• Net proceeds after taxes: $56,610 (before platform fees)

Special considerations:

Incentive Stock Options (ISOs):

• If you exercised ISOs and held shares 2+ years from grant and 1+ year from exercise, you qualify for favorable long-term capital gains treatment
• Entire gain (sale price minus strike price) taxed as long-term capital gains
• If you don't meet holding requirements, some/all gain taxed as ordinary income (disqualifying disposition)
• AMT paid at exercise may create additional basis adjustment

Non-Qualified Stock Options (NSOs):

• You paid ordinary income tax at exercise on spread (FMV - strike price)
• Your basis is strike price + spread taxed at exercise
• Additional gain from exercise to sale taxed as capital gains

Restricted Stock Units (RSUs):

• You paid ordinary income tax at vesting on full FMV
• Your basis is the FMV at vesting
• Only appreciation from vesting to sale is taxed as capital gain

Tax planning strategies:

• Hold for long-term rates: Wait until 1+ year holding period for lower rates
• Timing: Sell in lower-income year to reduce tax bracket
• Tax-loss harvesting: Offset gains with losses from other investments
• Installment sales: Structure sale over multiple years to spread tax liability
• Qualified Small Business Stock (QSBS): If eligible, up to $10M or 10x gains may be tax-free

Consult a tax advisor specializing in equity compensation before selling. Tax rules are complex and individual circumstances vary significantly.

Other Costs

• Accreditation verification: $0-$500 if using third-party service (buyer typically pays, but seller might need for certain transactions)
• Escrow fees: $500-$2,000 for independent escrow agent (sometimes required)
• Transfer agent fees: $0-$500 for processing share transfer on cap table
• Tax preparation: $500-$2,000 additional cost if sale complicates tax return

Net Proceeds Example

Selling $100,000 worth of shares through EquityZen:

• Gross sale price: $100,000
• Platform fee (5%): -$5,000
• Legal review: -$1,500
• Subtotal: $93,500
• Federal + state taxes (assume 35% effective rate on $90K gain): -$31,500
• Net proceeds to you: $62,000

On a $100K gross sale, you might net $60K-$70K after all costs—understand this going in.

Common Obstacles and How to Overcome Them

Secondary sales frequently encounter obstacles that delay or kill transactions. Here are the most common challenges and strategies to address them.

Obstacle 1: Company Exercises ROFR or Rejects Sale

The problem: Company refuses to approve your sale or exercises its right to buy your shares instead of approving third-party buyer.

Solutions:

• Communicate proactively: Talk to company (HR, CFO, General Counsel) before initiating sale to understand their stance
• Work within company programs: Wait for official tender offers or secondary windows where approval is pre-granted
• Choose approved buyers: Some companies maintain lists of approved buyers (existing investors, specific platforms)
• Price appropriately: Pricing too low raises red flags and increases rejection risk
• Show legitimate need: Some companies are more sympathetic to genuine financial needs (down payment, medical costs) vs. speculative selling
• Be patient: If rejected, ask when company might approve sales (after fundraising closes, annually, etc.)

Obstacle 2: Cannot Find a Buyer

The problem: Your company isn't well-known, isn't growing quickly, or your pricing is too high, resulting in no buyer interest.

Solutions:

• Adjust pricing: Lower asking price to attract more buyers
• List on multiple platforms: Increase exposure by using 2-3 platforms simultaneously
• Target existing investors: Reach out to VCs already invested—they know the company and may want to increase position
• Wait for company milestones: Buyer interest increases after funding rounds, revenue milestones, or IPO filing
• Bundle with other sellers: Partner with other employees to create larger, more attractive block
• Consider broker services: Brokers like Rainmaker actively source buyers for hard-to-sell positions

Obstacle 3: Shares Are Unvested

The problem: Your options or RSUs haven't vested yet, so you don't own shares to sell.

Solutions:

• Wait for vesting: Most straightforward—wait until shares vest before attempting sale
• Early exercise: Some companies allow early exercise of unvested options (you buy shares before they vest, file 83(b) election). The shares are subject to repurchase if you leave before vesting, but you own them and start capital gains holding period.
• Negotiate acceleration: In certain circumstances (leaving company, restructuring) you might negotiate vesting acceleration
• Understand you cannot sell unvested equity: No legitimate platform or buyer will purchase unvested equity

Obstacle 4: Options Expiring Soon

The problem: You're leaving the company and options expire in 90 days, but you need to sell shares to cover exercise cost.

Solutions:

• Exercise immediately and list: Exercise options as soon as possible after leaving to maximize time for sale process (60-120 days typical)
• Cashless exercise programs: Some platforms (ESO Fund, 137 Ventures) will front exercise costs in exchange for portion of proceeds—expensive but enables exercise without cash
• Negotiate extended exercise window: Ask company for extended exercise period (5-7 years) before leaving
• Personal loan: Take loan to cover exercise cost, repay from sale proceeds
• Partial exercise: Exercise only what you can afford and have high confidence in selling
• Accept you may lose some options: Sometimes walking away from underwater or hard-to-sell options is rational decision

Obstacle 5: High Exercise Cost / AMT Burden

The problem: Exercising your ISOs triggers massive AMT liability you cannot afford, or exercise cost is prohibitively high.

Solutions:

• Exercise and immediate sale: Exercise and sell simultaneously (if company approves)—this converts ISOs to NSO treatment but avoids AMT trap
• Partial exercise: Exercise only enough options to stay below AMT threshold
• Exercise over multiple years: Spread exercise across years to manage AMT annually
• Exercise early in year: Gives you full year to complete sale and recover cash
• Alternative financing: ESO Fund, EquityBee, and similar services will fund exercise/AMT in exchange for share of proceeds
• Tender offer timing: Wait for company tender offer which may allow cashless transaction

Obstacle 6: Buyer Backs Out During ROFR Period

The problem: Buyer commits, you notify company and wait 30 days for ROFR, then buyer withdraws for market/personal reasons.

Solutions:

• Get strong commitment: Work with serious buyers on reputable platforms—less likely to back out
• Request earnest money: Some transactions include buyer deposit (1-2% of purchase price) forfeited if buyer withdraws
• Multiple backup buyers: Before submitting ROFR, have backup buyers in case primary withdraws
• Clear communication: Ensure buyer understands timeline and process before committing
• Be prepared to restart: If buyer backs out after ROFR approved, you can find new buyer without re-doing ROFR (company approval typically remains valid 90-180 days)

Obstacle 7: Documentation and Administrative Delays

The problem: Transaction stalls due to slow document preparation, company unresponsiveness, or administrative issues.

Solutions:

• Use experienced platform: Established platforms have streamlined documentation processes
• Proactive follow-up: Stay on top of company, platform, and buyer for timely responses
• Build in buffer time: Don't attempt sale with tight deadlines—allow 90-120 days
• Prepare documents in advance: Gather stock certificates, option agreements, etc. before starting process
• Escalate when needed: If company is slow, escalate to higher-level contacts

Obstacle 8: Company in "Quiet Period" or Blackout

The problem: Company blocks all secondary sales during fundraising, acquisition discussions, or pre-IPO quiet period.

Solutions:

• Wait it out: These blackouts are typically temporary (30-90 days)
• Inquire about timeline: Ask company when blackout will lift
• Position for immediate sale: Line up buyer and complete documentation so you're ready when blackout ends
• Understand rationale: Blackouts during sensitive periods are legitimate and serve valid business purposes