The Smart Way to Approach Tender Offers: Designing Your Tender Offer Decision Around Your Bigger Life Goals

As a Principal Wealth Advisor at Compound, Nicholas Garcia has spent 15+ years helping individuals and families navigate equity compensation, liquidity events, and comprehensive financial planning.

‍Don’t fall into the "company stock tunnel vision" trap.

This describes the mindset of believing that holding 100% of your equity is the sole and most intelligent path to financial growth.

It’s great to be positive, but imagining only upside scenarios doesn’t consider the full picture. When you let emotion — or what your colleagues are doing — lead your tender offer decision, you’re not actually looking out for yourself or clearing a path toward your life goals. 

Here, we’ll share how to move away from the binary "hold everything or sell everything" mindset, helping you think about strategic partial liquidity that helps you hit career, family, and investment goals when you see a tender offer. 

What most early-stage tech employees don’t think about

What if your company's value stays flat or falls in the upcoming years?

Tech employees usually assume that holding all company stock is the best way to maximize their returns. They often focus exclusively on scenarios where the company performs well (After all, tender offers provide an exciting and rare opportunity to cash out on years of previous work). 

Those who receive tender offers often believe in their company, and have invested years and lots of creative efforts to help it succeed. Here’s what happens: They don't even think about the downside. 

But here are the limitations of a hold-and-hope mentality. This flawed mindset: 

• Ignores scenarios where company value stagnates or declines
• Creates financial vulnerability to single points of failure
• Limits life choices and career flexibility
  

The Concentration Risk Reality: Having all your wealth in one company creates vulnerability that most people don't fully grasp.
‍
Here’s the thing — if all your wealth, your income, and your net worth is tied to one company, you probably should diversify over time. What if that company’s stock plummets? If all your wealth is concentrated there, now you have nothing. Employees often don't realize that opportunities to sell don’t guarantee cash in hand when they need it most. 

Many employees receiving tender offers are facing this type of decision for the first time. They get an overwhelming 40-page PDF and don’t know what to do next. They either push off the decision, and miss the opportunities that liquidity can provide, or go all in, putting all their cards on the table.

Don’t think narrowly: liquidity can be way more than money in the bank

There are many factors you should consider when you’re thinking about selling your shares, not just how your company performs. 

How to match your tender offer decision to your priorities

Everyone’s goals are different. Some people want to take time away from work, some want to pay off debt, some are saving for their kids’ education. Liquidity can help you meet your goals, and it can open doors you didn't think about before (putting the cash flow toward building generational wealth, taking a sabbatical, or starting a business of your own). 

Many tech employees are so burnt out after four to five years of working that they desperately need time off, but can't afford it without liquidity. The financial gains could afford them precious time for resting and recalibrating. Others are working hard to support their families, and a lump sum can seriously lift a weight off their shoulders.

But keep in mind: There may be other ways to support these goals, like by expanding your investment portfolio, which often come with less risk. In some cases, partial liquidity and other strategic investments can help you come out ahead. This is where scenario modeling can be incredibly helpful (We cover that in this step-by-step breakdown). 

[Image of scenario modeling in Compound’s dashboard, showing the potential takehome $ after taxes] 

Real Example: One couple had a big liquidity event. Afterwards, they were able to stop working their full-time jobs, help their relatives pay off debt, and start their own business. Core lesson? Selling their shares freed up cash to help them meet a number of family goals and help them dive into their interests.

How to match your tender offer decision to your life stage

It's all about you (not what your coworker is doing). This is a personal decision — not something that the three loudest people in your Slack should be deciding for you. Their life circumstances and goals are different from yours. 

A newlywed saving for a home should think differently than a single engineer with a seven-figure brokerage account and no debt. What makes sense for your coworker could be completely wrong for you — not just based on your income, but based on your existing financial assets, family needs, and risk tolerance.

Always wanted to buy a home? A tender offer could open up a path to homeownership in high-cost cities. Want to put your kids through college? It could also help you grow your college fund and minimize student debt. 

Keep in mind: Equity looks different for each employee at your company. Some have multiple equity grants from different time periods, making partial liquidity even more strategic — all due to differences in valuation and the tax implications of each grant.

Taking other areas of financial growth into consideration 

Many employees think selling company stock means missing out on growth, but your wealth can grow just as much in other investments. 

Remember: You don't have to choose between holding everything or selling everything. Smart planning means you position yourself to make sure that, no matter what happens to your company’s stock price, you won’t feel too much regret.

Selling some now could mean investing elsewhere and diversifying your portfolio to maximize your chances for growth. This way, you won’t be reliant on just your company if things do go south. 

[potential second image a side-by-side line chart comparison: anonymous trajectory of financial growth from “holding” in tender offer vs. financial growth from alt. investment]

Reality Check on Company Performance: The sophisticated approach involves modeling what happens if your company doesn't become the next unicorn. Many employees get tunnel vision and only think about upside scenarios, but smart planning requires considering what happens if the company stays flat or declines.

Why you should look to the numbers (not your emotions)

When you put your feelings aside, you’ll see better outcomes in the long run. Fear and greed can’t run your choices.

Use mathematical models to show multiple scenarios before you make any decisions. Give yourself "reality checks" by modeling downside scenarios, not just the upsides. Numbers can’t lie, but emotions matter, too. As you model different scenarios, ask yourself: How would you feel in each scenario? 

You should also ask yourself "leading questions" and note your top priorities. 

• Would a hit to a company’s valuation be devastating to your finances, or just disappointing? 
• What are your near-term financial needs? Do you have debt to pay off? Kids to put through school? Down payments? Could selling some equity today help remove some of these needs or stressors?
• What are your future goals? Would you be in a good spot if you sold some equity today, reinvested, and held onto some equity for the future (even if your company valuation decreases)? 

If you do sell shares, remember that you're not “selling out” — you're diversifying your investments. You can believe in the company and still take some chips off the table. 

At Compound, our advisors use our equity modeling tool to show clients different scenarios, using comparable public companies. They show what could happen if the company going through a tender offer reaches a certain revenue multiple, factoring in whether the client sells or holds onto specific percentages in company equity. This helps clients visualize potential outcomes and understand the emotions they feel with each one. 

Taking action on your tender offer

Have your plan ready, and don’t panic. 

Once people sell for the first time, it's like a weight lifted off: Okay, you've done all this work. You’ve worked with this company for many years. Now you’ve finally realized some of the fruits of the labor that you put into it.

Remember: It's not all or nothing. The smartest approach to company equity isn't holding everything or selling everything — it's creating strategic optionality that aligns with your life goals and still manages risk.

We can help you break free from tender offer tunnel vision by providing the mathematical modeling and scenario planning you need to make informed decisions about your equity. Our advisors specialize in helping tech employees understand all their options, not just the obvious ones.

For a step-by-step explanation of navigating a tender offer, read our Manual here: manual.compoundplanning.com/chapters/navigating-secondary-tender-offers