Employee Liquidity in Private Companies
Matthew Moore, head of design at Lime, on private stock and employee diversification
The real issue was not compensation, it was lock in. At late stage private companies, early employees can sit on life changing paper wealth that they cannot use without leaving upside behind. That creates a bad fit where people who are ready to move on stay anyway, because selling or exercising is restricted, tender windows are sporadic, and years of value they helped build remain trapped on the cap table.
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Moore describes Uber employees who were unhappy in a much larger company but felt forced to keep working because leaving could mean losing the value of equity earned over years. Uber tried to ease that with secondary sales, a seven year exercise window, and earlier programs like Clockwork, but access was limited and uneven.
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This is a standard late stage private company problem, not an Uber one off. As companies stay private longer, employees face concentrated net worth, tax bills, and life events like buying a house or paying medical costs, while issuers still want tight control over who gets onto the cap table.
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Structured recurring liquidity changes the dynamic. When companies let employees sell a small portion regularly, around 10% to 20% is a common design range, it lowers pressure on any one tender, reduces all or nothing decisions, and lets shares move from short term holders to investors who want to own for longer.
The market is moving toward private companies acting more like semi liquid public ones. As more firms adopt recurring tenders and controlled secondary programs, equity works less like a retention trap and more like real compensation, which should make it easier for companies to keep the right people, replace the wrong shareholders, and stay private on their own terms for longer.