tender offer

Definition

When a company or investor offers to buy shares from existing shareholders at a set price, providing liquidity without a full exit. A release valve for the equity pressure cooker.

Example Usage

Facebook arranged a tender offer for early employees before their IPO, letting them sell up to 20% of their vested shares.

Origin

Public markets terminology adapted to private company liquidity

Fun Fact

Tender offers became popular as tech IPOs delayed longer, with some employees waiting 10+ years for liquidity.

Source: Corporate finance and liquidity terminology

Related Terms

Intermediate

diluting

The act of reducing ownership percentage by issuing new shares, or what happens to founders' equity every time VCs open their checkbooks. In chemistry, it means adding solvent to weaken a solution; in startup world, it means your 50% stake just became 30% and you're supposed to smile because the company is now "worth more." The most expensive way to raise money without technically losing money.

🚀 Startup / VC

Intermediate

vesting cliff

The sadistic waiting period before any of your stock options actually belong to you, typically one year. It's designed to prevent you from taking the job and immediately quitting, essentially holding your compensation hostage for good behavior.

🚀 Startup / VC

Beginner

friends and family round

The first fundraising round from people who love you enough to give you money despite zero evidence your idea will work. The most expensive way to ruin Thanksgiving dinner conversations.

🚀 Startup / VC

Beginner

Freemium

A business model where the basic product is free but all the useful features cost money, like a restaurant that gives you a free plate but charges for the food. It's the startup equivalent of a drug dealer's first-one's-free strategy, but legal and with worse margins.

🚀 Startup / VC

Advanced

Blitzscaling

The strategy of growing a company at breakneck speed while intentionally ignoring efficiency, profitability, and the screams of your finance team. It's named after the German military tactic because both involve advancing recklessly and hoping the supply lines hold.

🚀 Startup / VC

Advanced

Equity Dilution

The process by which your ownership percentage shrinks with each funding round until you own approximately as much of your company as you own of the Pacific Ocean. It's like splitting a pizza with more and more people, except you baked the pizza and now you get one olive.

🚀 Startup / VC

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