Sell Pre-IPO Shares: How It Works, When You Can Sell, and What to Expect
If your company is still private and you’ve vested equity, you may be wondering: Can I sell my shares before an IPO? The answer is… maybe.
Selling pre-IPO shares, also called a “secondary sale”, isn’t like trading public stocks. You can’t just log into a brokerage account and offload your shares. These transactions typically require company approval, a willing buyer, and a maze of legal and tax considerations.
Can You Sell Pre-IPO Shares?
Technically, yes. Practically? It’s often very hard.
Selling pre-IPO shares is considered a “secondary sale.” In most startups, this requires the company’s approval. They might block the sale entirely or restrict who you can sell to. Even if you get approval, you still need to find a buyer, usually an investor, fund, or high-net-worth individual, and negotiate a price.
It’s not impossible, but successful transactions are rare. Most employees exploring a private share sale run into roadblocks like:
- Company refusal or silence
- Buyer dropping out
- Heavy discounts to fair market value
🔗 Want the full breakdown? Read our guide on secondary sales
How to Sell Pre-IPO Shares
If your company allows it, here’s what the process generally looks like:
- Get approval from your company to sell.
- Find a buyer: often an investor, fund, or private market platform.
- Negotiate terms and pricing.
- Sign legal documents and navigate any transfer restrictions.
- Close the transaction: which can take weeks or months.
Some platforms like Forge or Hiive facilitate these transactions, but success rates vary and many employees still face delays or dead ends.
When Can You Sell Pre-IPO Shares?
There are a few common scenarios:
- Tender Offers: Company-approved sales, often during a funding round. You might be invited to sell a portion of your shares. Read our full guide to tender offers
- One-off Secondary Sales: You find a buyer, and the company approves.
- M&A Activity: Occasionally includes partial liquidity for employees pre-close.
Should You Sell or Exercise?
If your company allows it and you find a buyer, selling can be a way to access liquidity, but it comes with tradeoffs:
- You owe taxes on the gain.
- You lose all future upside.
- The process can be slow or fall through.
For those who still believe in their company, there’s another option: exercise your options and hold the stock. That way, you retain potential upside while starting the clock for long-term capital gains treatment.
We cover this in more depth here: Selling vs. Exercising: Which is Right for You?
But exercising can be expensive, that’s where ESO Fund comes in. We provide non-recourse financing to help employees cover the cost of exercising, including taxes, so they can hold onto their shares without risk.
If you’re thinking about selling, but still believe your company has more room to run, let’s talk.
And if you're looking to unlock some value without giving up your entire position, ESO Fund can also support partial liquidity strategies.
Written by Jordan Long, Marketing Lead at ESO Fund
