Realistic projections for private equity

Realistic projections are the difference between treating startup equity like cash and treating it like a risky side bet. In practice that means starting with what can actually be sold, when it can be sold, what taxes get triggered, and how often private prices prove softer than the last funding round. Compound is building around that gap, by turning scattered option grants, 409A updates, and secondary opportunities into scenario plans tied to spending, taxes, and diversification.

• For most startup employees, the hard part is not knowing the headline valuation. It is knowing whether they can exercise before expiration, whether there is any real buyer, and how much cash they would keep after taxes. Compound pulls data from systems like Carta and Shareworks so those decisions can be modeled instead of guessed.
  1 sacra
• Private stock pricing is often lumpy and negotiated, not continuously marked by a broad market. Research on secondaries shows private shares may trade only occasionally, often with issuer approval, and can diverge from the last preferred round price. That is why a realistic case usually means haircutting paper wealth and testing multiple exit dates and prices.
  1 sacra 2 sacra
• The broader market is moving toward more structured liquidity, because employees and early investors increasingly need partial exits before an IPO. Secondary programs, tender offers, and platforms like Forge, EquityZen, and Nasdaq Private Market exist to solve that problem, but each still comes with limits on speed, access, and price certainty.
  2 sacra 3 sacra

As private companies stay private longer, wealth managers that can translate private equity into cash flow plans will become more important. The winning products will not be the ones that promise to predict exits. They will be the ones that help clients sell small amounts at the right times, plan taxes early, and avoid building their lives around paper net worth that may never fully materialize.