Recurring liquidity lets startups compete
Arjun Sethi, co-founder of Tribe Capital, on investor allocation strategies and democratizing access to capital
Liquid private stock turns startup equity from a vague promise into a near term compensation tool, which is why it can let late stage private companies recruit against Big Tech in a way earlier startups usually cannot. The real shift is not just higher paper valuations. It is that employees can sell a slice of vested stock on a recurring schedule, use that cash for a house, taxes, or savings, and still keep most of their upside, which makes private company offers feel closer to public company pay packages.
-
The pressure shows up when companies hit late stage scale. By Series C and beyond, teams are often competing for candidates who can join Facebook, Google, or another public company and get stock they can actually monetize. At that point, liquidity becomes part of recruiting, not a side benefit.
-
Recurring liquidity matters more than one off tenders because it changes behavior. If employees know they can sell a small amount every quarter, they do not need to swing for one perfect sale. That makes pricing more orderly and lets companies offer predictable, off balance sheet cash value on top of salary.
-
This also helps companies mature operationally. Once shares trade on a regular cadence, management has to provide cleaner disclosures, point to a real market price in hiring and M&A, and start building investor relations habits before an IPO. Spotify used that playbook to create pricing history ahead of its direct listing.
The next step is a broader shift from occasional employee tenders to always on liquidity programs for mature private companies. As that happens, the strongest private companies will look more like hybrid public private businesses, with enough liquidity to hire and retain top talent, but enough control to choose their investors and time their path to the public markets.