To help equity leaders design liquidity events that attract and retain talent, Emiley Jellie, Managing Director and Head of Private Company Liquidity at Morgan Stanley, sat down for a virtual discussion with Jessica Annis, Senior Legal Counsel at Canva, Mike Podolny, Partner at Sidley Austin LLP and Luke Kirrane, Executive Director, Private Company Liquidity at Morgan Stanley to discuss what’s top of mind. Below are some insights from their discussion:
What Liquidity Trends Are Top of Mind For Equity Leaders?
According to the Morgan Stanley at Work 2026 Liquidity Trends Report, private companies that offer equity compensation rely heavily on liquidity events to attract and retain talent. While 57% of private companies say their ultimate goal is an IPO, 47% expect a tender offer to be their next liquidity event. Despite that, only 26% feel confident in their liquidity readiness.
“With private companies increasingly approaching liquidity as an ongoing part of their growth strategy, the planning and execution around these events is more important than ever,” Luke Kirrane shared. “After all, employees’ ability to realize value through liquidity events drives equity compensation plan effectiveness.”
What Should Private Companies Consider in Advance of a Tender Offer?
While there are several elements that contribute to readiness, five key topics often take center stage, particularly when planning for tender offers:
- Eligibility. Set clear eligibility criteria beyond employee tenure. Elements to consider include performance, function, geography (including cross-border eligibility) and whether to limit the offer to employees or include investors and other stakeholders.
- Valuation. Determine an appropriate valuation, recognizing that tender offer pricing often defaults to the last round of preferred financing, while market realities may suggest a higher or lower price.
- Award types. Plan proactively for legal and accounting treatment of double-trigger restricted stock units (RSUs) relative to stock options and other types of equity.
- Disclosures. Share material information with all parties, including financial statements, transaction risk factors, future projections and any material documents that may impact valuation.
- Employee communications. Develop a robust communication and education plan. In their most recent liquidity event, for instance, Canva bolstered their Tender Hub with an AI-enabled bot that answered over 3,000 employee questions in real time.
“To navigate these issues, it’s important to have internal alignment across the board,” Jessica Annis noted. “It helps to clarify the end goal of the tender offer first and then work backwards to structure the transaction in a way that meets that goal.”
What’s The Role Of Liquidity Events Going Forward?
“Private companies increasingly approach liquidity events as part of the IPO journey,” Mike Podolny explained. “Today, virtually every financing round has some sort of secondary component and more companies are implementing serial secondary programs. Looking forward, that trend is likely to continue.”
Given these realities, advance preparation is essential. “The earlier companies get started, the more time they have to clean up their cap table, effectively structure the deal, develop a cohesive narrative and streamline workflows,” Emiley Jellie added.
To learn how to lay a solid foundation for a liquidity event and discover actionable strategies to consider along the way, access the full replay.
Frequently Asked Questions About Liquidity Trends
How far in advance should companies start preparing for a liquidity event?
While the timeline varies depending on a company’s stage and goals, early planning is critical to give teams time to review their cap table, align internal stakeholders, address compliance requirements, develop employee communications and establish processes that support a smooth execution.
Why are employee communications so important during a tender offer?
Employees often have questions about eligibility, pricing, tax implications, timelines and their individual choices. Clear, timely and consistent communication can help employees make more informed decisions while reducing the administrative burden for equity teams.
What teams should be involved in planning a liquidity event?
Successful liquidity programs typically require collaboration across multiple functions. Internally, that generally includes legal, finance, HR, equity administration and leadership. Externally, it includes your law firm, tax advisor and equity platform partner.
