• Introduction
    ▼
    • Why Companies Are Embracing Employee Liquidity
    • How to Run a Successful Liquidity Program
  • Set Eligibility and Restrictions
  • Identify an Optimal Buyer and Structure
  • Set a Price
  • Investigate Impact on the 409A Valuation
    ▼
    • 409A Valuation
    • Hypothetical Scenarios
  • Prepare Company Disclosures and Information for Due Diligence
  • Provide Information to Employees
  • Determine the Legal Implications
    ▼
    • Stock Transfer Restrictions and Rights
    • Symmetry of Information Sharing
    • Exposure to Legal Liabilities
  • Determine the Tax Implications
    ▼
    • Taxation Issues Around Each Type of Stock Issuance
    • QSBS-See If Anyone Qualifies for Special Tax Treatment
    • How to Make an Employee Tender Offer Less Taxing
  • Get Your Message Right – Inside the Company
  • Conclusion
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Step 2

Identify an Optimal Buyer and Structure

Once eligible sellers have been determined, a company must identify a buyer, or investment source, for its employees’ shares. An ideal source largely complements the company’s cash position and its tolerance for diluting its cap table and additional liquidation preferences.

Buyer options for employee common shares
  • Introduction
    • Why Companies Are Embracing Employee Liquidity
    • How to Run a Successful Liquidity Program
  • 1
    Set Eligibility and Restrictions
  • 2
    Identify an Optimal Buyer and Structure
  • 3
    Set a Price
  • 4
    Investigate Impact on the 409A Valuation
    • 409A Valuation
    • Hypothetical Scenarios
  • 5
    Prepare Company Disclosures and Information for Due Diligence
  • 6
    Provide Information to Employees
  • 7
    Determine the Legal Implications
    • Stock Transfer Restrictions
    • Symmetry of Information
    • Exposure to Legal Liabilities
  • 8
    Determine the Tax Implications
    • Taxation Issues Around Each Type of Stock Issuance
    • QSBS — See If Anyone Qualifies for Special Tax Treatment
    • How to Make an Employee Tender Offer Less Taxing
  • 9
    Get Your Message Right—Inside the Company
  • Conclusion

Up Next:

STEP 3

Set a Price

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