The AI Gold Rush Is Breaking a Silicon Valley Taboo: Cashing Out Before the IPO

Wall Street Journal
By Kate Clark
12 February 2026

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When AI workplace startup Notion offered employees the chance to cash out some of their shares as part of a $270 million tender offer in January, the opportunity drew higher requests from former employees than the tender could accommodate.

The company had to scale back its payouts to former employees, according to people familiar with the matter, and Chief Executive Ivan Zhao apologized to them afterward.

Notion is among a host of startups and tech companies, including Stripe, OpenAI, Anthropic, Databricks and SpaceX, that are giving employees eager to access wealth tied up in private shares a way to cash out some of it.

It marks a shift in Silicon Valley culture as companies stay private longer. Selling startup shares early was long viewed as taboo and a sign of lacking long-term commitment.

Companies have been able to “successfully remove the stigma of doing secondary offers for employees,” said Charlie Franklin, chief executive of Compa, which tracks compensation data. “The dam is broken.”

The number of tender offers completed on Carta, which offers financial services to startups, climbed 60% in 2025 from the prior year. Even young startups are pursuing tender offers, as demand surges for private artificial-intelligence stocks and founders recognize that such deals are crucial to retaining talent.

“If on paper you’re worth 10 million bucks, you’re going to want liquidity for that, because you’re living in a studio apartment in San Francisco, when you could instead go and buy a 6,000-square-foot house in Atherton,” an exclusive suburb, said Noel Moldvai, co-founder and chief executive of private-stock marketplace Augment.

Stripe, founded in 2010, is in the early stages of another tender offer that will value the payments company at over $140 billion, up from $91.5 billion a year earlier, according to people familiar with the matter.

Anthropic has also allowed employees to sell shares in the past and is planning another tender offer at a $350 billion valuation, according to people familiar with the matter. Bloomberg earlier reported on Stripe and Anthropic’s planned tender offers.

OpenAI completed a massive $6.6 billion tender offer last year that valued the company at $500 billion. News Corp, owner of The Wall Street Journal, has a content-licensing partnership with OpenAI.

SpaceX holds semiannual tender offers for employees, and Databricks has given employees multiple opportunities to sell shares.

There are still some concerns that employee share sales could sap motivation by removing some of the incentive to hang on until a big sale or initial public offering, said Brian Lee, a partner at law firm Baker Botts.

These days, however, those fears are outweighed by pressure to please employees—and demand from investors eager for exposure to top AI startups. Employee tenders give investors an opportunity to buy shares directly from workers. The sales typically involve common stock, which carries fewer rights, at preferred-share valuations.

AI startup Chief Executive Grant Lee remembers having to borrow over $200,000 to exercise his stock options as a rookie startup employee almost 10 years ago. When his then-employer, Optimizely, later sold, he didn’t make his money back.

As the leader of Gamma, he says giving employees a simple way to cash out some of their equity, without paying upfront, is crucial. Gamma, which was founded in 2020, recently completed its first tender offer, allowing about 30 employees to sell as much as 20% of their vested equity in a deal led by the venture firm IVP that totaled $44 million.

Lee said some of his employees plan to use their earnings to buy homes close to the startup’s San Francisco headquarters. Other startup employees said they are using the proceeds to prepare for new babies, purchase engagement rings or fund weddings.

Younger startups have taken notice of the trend. The legal AI company Harvey, which was founded in 2022, completed a $75 million tender in 2025 in conjunction with a $150 million primary raise at an $8 billion valuation, according to people familiar with the matter. ElevenLabs, the AI video startup also founded in 2022, allowed employees to sell $100 million of shares at a $6.6 billion valuation last year, the company said in September.

The current rush of tenders might not last, said Franklin. Compensation at AI startups is inflated and likely to come back down, he said.

“The chickens are going to come home to roost and these companies will pay more sustainably over time,” Franklin said. “Everyone is going to get as much as they can before the music stops.”