Secondaries Explained

Reference · Deal types & structures

Tender offer

A company-organized liquidity event: eligible holders may sell up to a set amount of stock, at one price, to pre-approved buyers, on a defined timeline.

Worked example

A worked example of tender-offer proration (illustrative figures):

  1. A company sets aside a $20 million tender pool and invites eligible employees to submit sell orders up to a per-person cap.
  2. Total requests come in at $35 million — the tender is oversubscribed 1.75x relative to the $20 million pool.
  3. The company prorates every seller down to roughly 57% of what they requested ($20M ÷ $35M). An employee who wanted to sell $100,000 of stock is able to sell about $57,000, and keeps the rest for the next window.
  4. Proration is the single biggest reason a tender offer's advertised size doesn't match what any individual seller actually gets — always check whether a tender is likely to be oversubscribed before assuming you can sell your full requested amount.

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