Can employees sell their private company shares?

Vested equity has real value, but for most employees, turning it into cash depends on a company-level event, not something they can trigger on their own timeline. There's no open market for private company shares until one of those events happens.

Why employees can't just sell whenever they want

Private company shares almost always carry transfer restrictions written into the equity plan or the company's governing documents. The most common one is a right of first refusal (ROFR): before an employee can sell to an outside buyer, the company or its investors usually get the option to buy the shares first, on the same terms. Some plans block outside sales entirely until a liquidity event.

The two most common paths to liquidity

IPO: Once the company goes public, employees can sell shares on the open market, typically after a lockup period (often around 180 days) that restricts sales immediately following the IPO.

Acquisition: If the company is acquired, equity is usually cashed out or converted as part of the deal terms, either paid in cash, converted into the acquiring company's stock, or some mix of both, depending on the acquisition agreement.

For most employees, one of these two events is what actually turns equity into cash. Everything else below is the exception, not the rule.

Tender offers

A tender offer is a window the company opens (sometimes with outside investors) to buy back shares directly from employees before an IPO or acquisition happens. It's initiated by the company, not something an employee can request, and it doesn't happen on a fixed schedule. If one opens, employees will receive specific instructions on how to participate at that time.

Direct or secondary sales

Some plans allow a private sale to a specific buyer, but it's almost always subject to company approval and ROFR. Carta doesn't broker or approve these sales.

Why it matters

Employees sometimes expect to sell vested equity whenever they want, the way they would public stock. In practice, liquidity is tied to the company's timeline, an IPO, an acquisition, or an occasional tender offer, not the employee's own schedule. Setting that expectation early avoids frustration later.