Case study · North America
Databricks: liquidity on a schedule, not a cliff
The situation
Databricks' RSU grants, like many pre-IPO companies', historically carried a "double trigger": shares only converted from restricted units into actual stock once two conditions were met — time-based vesting and a liquidity event such as an IPO. That second trigger meant employees could have fully time-vested RSUs that still weren't real, sellable shares, sometimes for years, while the company stayed private and kept raising primary rounds at higher valuations.
How the deal worked
In 2025, Databricks removed the second trigger. Time-vested RSUs began converting into actual shares on their normal vesting schedule, whether or not the company had gone public. That single structural change turned a large, growing pool of paper equity into something employees actually held — and created a recurring need for a liquidity mechanism, since there was still no public market to sell into.
Databricks answered with periodic company-organized tender offers instead of waiting for an IPO. A tender that closed in March 2026 was, for many participants, the second such window within about a year, priced at the company's then-current 409A-implied valuation. The tenders followed a December 2025 Series L that raised $4 billion at a $134 billion valuation, with an IPO widely expected in the second half of 2026.
The outcome
Employees now have a predictable, if not guaranteed, path to converting vested equity into cash roughly annually, rather than facing years of illiquidity with no visibility into when — or whether — an IPO would arrive. For the company, offering that liquidity is increasingly framed as a retention tool in a hiring market where AI and data infrastructure talent has significant leverage.
What it teaches
A seemingly technical plan-document detail — whether an RSU has one trigger or two — has an outsized effect on when equity becomes real, sellable stock. And once vested shares are real, companies that want to keep top talent while staying private for years longer than prior generations of startups increasingly need a recurring liquidity program, not a one-off tender, to match. See employee & founder liquidity for the mechanics of a single tender.
What to look for in a deal like this
- The frequency: recurring tenders at a company of this size are effectively a substitute listing mechanism for employees.
- Whether each round is struck against a fresh primary valuation or a stale one.
- How much of the demand comes from new institutional entrants, which indicates whether the private market can absorb the size.
Frequently asked
Why do the largest private companies keep running tenders instead of listing?
Because they can raise capital privately at scale, and a tender removes the main internal argument for going public. Listing then becomes a strategic choice rather than a liquidity necessity.
Do tender offers have a size limit?
In practice, the limit is buyer appetite. A tender needs someone with capital willing to purchase at the set price, which is why the largest programmes involve institutional buyers rather than the company alone.
Compare this with the other North America deals in thecase-study index, or readwhy secondary sales happen for the motivation behind each deal shape. The glossary defines the terms used above.