The Complete Guide to Navigating Secondary Tender Offers: A Step-by-Step Decision Framework

As a Principal Wealth Advisor at Compound, Nicholas Garcia has spent 14+ years helping individuals and families navigate equity compensation, liquidity events, and comprehensive financial planning. 

When you’re dealing with a secondary tender offer, you’re making an important financial decision — one that could change your life. But you shouldn’t let emotions drive your decision. There are logical steps you can take to ground you (amid all the excitement) and make sure you make the best decision you can.

Read on to see how you can evaluate your options, calculate true net proceeds, and make decisions that match up with your financial goals.

Tender Offers with Time Constraints

Usually, when you go through a tender offer, you’ll get a 40-page PDF, no guidance from your company, and 1-2 weeks to make a decision. It’s overwhelming, and we’ve seen how the pressure affects our clients’ thinking around such a big moment.

It’s not just the information overload or the tight timeline that holds people back. There’s no rules about what percentages to sell and often no clear explanation of the tax implications. It can feel scary: Are you going to sell too much? Too little? 

The worst action we’ve seen people take: inaction. Ignoring the decision is still a decision, and those who do nothing miss out completely on rare liquidity opportunities that they might not see again for years.

And, maybe worse: Some people make decisions without thinking long-term. They lean on their emotions when making their decision and forget about generational wealth-building, their life circumstances, or even alternative investment gains. 

Facts and Figures: Taking the Emotion Out of Big Decisions

Relying on math and scenario planning can help you manage the emotions related to your decision. After all, numbers don’t lie. 

Step 1: Gather and Organize Your Equity Documentation

You should collect all of your equity-related documents, including option grant agreements, vesting schedules, recent 409A valuations, and valuations of comparable public companies. Create a spreadsheet listing all your equity grants with the grant date, number of shares, strike price, vesting schedule, and current status.

In your Compound dashboard, you can add all of your documents to the Vault and sync your company equity through our Carta integration. Then, with the Equity Planning tool, you can see predicted financial outcomes and tax implications according to different scenarios.

Some of the tender offers we’ve helped clients navigate include Anthropic, Figma, Stripe, and Plaid. 

When Plaid had a tender offer, we helped long-time employees (who’d seen plenty of funding rounds) through the process. Because they had different tenures, they all had equity from different grants with varying strike prices. And in this offer, they were capped at 15% of their total equity. 

That means they had to be strategic about what grants they were selling from: the oldest, lowest-cost basis grants (maximizing long-term capital gain treatment), or more recent grants (to preserve their longest-held positions for potential future appreciation).

Step 2: Calculate Your True Take-Home Amount

Taxes can get complicated (especially when the tax code changes every few years). Things like your state tax and even previous ISOs can affect you differently than other coworkers. 

The lesson: Don't just look at gross proceeds — calculate what you'll receive after taxes. That means taking into account your federal tax bracket, state tax rates, and potential Alternative Minimum Tax (AMT) implications. You can figure out that number using our equity simulator or by talking to an advisor.

Using Compound, we gave Plaid employees detailed tax calculations, figuring out that number by modeling the tender price per share, applicable taxes, withholding rates, and net settlement implications.

Step 3: Figure Out What Matters Most To You

Remember, this decision isn't just financial — it's deeply personal. You should write down your goals for the immediate future: the next two to three years. Do you need a down payment? Emergency fund? Debt payoff?

And what’s your risk tolerance? What percentage of your net worth is tied up in company stock? Some tech employees company-hop, and have tied their net worth across all of them. Then, when a company doesn’t do well, it’s difficult to pivot into other wealth building opportunities or to compensate for their losses.  

Ask yourself: Would a hit to a company’s valuation be devastating to your finances, or just disappointing? 

Different life and financial circumstances contribute to your decision.

Here are a few examples: 

The Young Software Engineer: A single person living in an apartment, they have no immediate cash needs. They can focus on maximizing wealth without thinking too much about risk. They’re thinking, "Why would I sell when my company could double in value this year, and the stock market only returns 6-8% annually?"

The Growing Family: A couple with children — living in a high-cost city — needs money for major life purchases, like a home. They’re thinking, "We've been waiting years to buy a house we can all fit in — this might be our only shot." They also might sell shares to fund specific life goals like down payments or children's education: clear and immediate needs.

The Tech Veteran: An early employee who’s spent four to five years at the same company, and watched it triple (or more) in size. They’re feeling disconnected from the original culture and burnt out. They’re thinking, "I don't know what I want to do next, but I know I don't want to do this anymore." They might sell to fund a sabbatical, make angel investments, or take time off to discover what they want to do next.

With Plaid employees, we used structured frameworks to tease out decision-making factors people might not even think of, whether they were financial, emotional, or career-focused. Those could include diversification beyond immediate needs, growth opportunities outside the company, and tax optimization timing.

Step 4: Model Different Scenarios and Their Long-Term Impact

Reality check time: Model what happens if the company grows the way you expect, goes to zero, or lands somewhere in between. With a simple spreadsheet, you can imagine what would happen if you sell 10%, 20%, or 30% of your equity under different company situations (strong growth, flat performance, a decline).

In Compound, you can adjust these numbers in real time to see each financial outcome.

Then, factor in how you would invest your proceeds, and what that investment could reach over 5-10 years. You can use conservative assumptions, like 5-7% annual returns for stock market investments, to get realistic projections.

When we modeled scenarios for Plaid clients with our equity modeling tool, we used comparable public companies. If Plaid grew to match a certain revenue multiple, clients who kept 85% of their equity (after selling the maximum 15%) would see great results. In the downside scenario where Plaid's growth stagnated or fintech valuations compressed, those same clients would have some protection because their 15% sale proceeds were diversified into other investments rather than remaining concentrated in Plaid stock.

Meanwhile, those who kept 100% of their equity would see the highest returns if Plaid matched the success of strong public companies but would be the most exposed if valuations declined. 

What matters most: visualizing outcomes beyond your immediate decision.

What Careful Scenario Modeling Allows

Emotionally, tender offers bring a mix of excitement, fear, and regret all at once to those participating. To cut through the chaos, we create visual models showing “what if” scenarios — so you can feel confident, logically and emotionally. 

Lead your decisions with mathematical modeling and scenario planning, while considering your personal life goals. This is YOUR decision — when everyone on staff is looking at their tender offer and spouting their opinions in Slack, that shouldn’t play a part in what you choose to do.

When you carefully project the possibilities and make decisions based on risk tolerance and long-term goals, you can optimize your financial outcomes to fit your needs and objectives. 

No more decision paralysis, and no surprise tax bills. With sophisticated modeling, you can look past “what everyone else is doing” and avoid under-selling due to peer pressure or over-selling due to fear — and make the moves that make sense for you. 

Navigating a tender offer or similar equity decision? Start your Compound dashboard, and let’s chat about how we can help.