Use Case
Employee Liquidity: Tender vs Secondary SPV
Employee Liquidity: Tender vs Secondary SPV
Addhyan Negi
·
Employee Liquidity: Tender vs Secondary SPV
A company-run tender is the issuer (or a designated buyer) offering to purchase employee shares on stated terms. A buyer-side secondary SPV pools capital and buys existing shares from holders. They differ on who signs, who KYCs, and who ends up on the cap table.
This page is not an offer or solicitation to buy or sell any security. Private-company securities are illiquid. Transfers usually need company consent and may be blocked by ROFR, right of first offer, or plan restrictions. Nothing here is investment, legal, or tax advice. No company names or valuations.
Employee tender vs secondary SPV
Employees hold vested common, early-exercise shares, or option shares they have already paid tax on. They want cash before an IPO or sale. The company wants orderly process, a clean cap table, and no stray buyers in the data room.
Company-run tender. The board authorizes a purchase window. The buyer is the company (treasury repurchase) or a named affiliate, employee fund, or designated purchaser. Employees elect into the program, sign issuer paperwork, and sell up to a cap at a price the company sets for that window. Unsold shares stay on the employee’s account.
Buyer-side secondary SPV. A sponsor forms an SPV, raises from LPs, and the SPV contracts with one or more employee-sellers. The company is not the buyer. The company is the gate: consent, ROFR, cap-table admin, sometimes a co-sale or transfer-window policy. Structuring steps are in how to set up a secondary SPV and the definition in what are secondary SPVs.
A third structure — the employee holding their own equity in an employee LLC — is a holding wrapper, not a liquidity program. It can sit on either path if the plan allows an affiliate transfer before the sale. It does not replace consent.
If a broker-dealer intermediates a matched secondary, AllocationsX is the BD for that market: Allocations Securities, LLC dba AllocationsX, member FINRA/SIPC, CRD 317750. Check BrokerCheck. That is a channel, not a tender. Private shares remain illiquid. It is not an offer.
Who signs
In a tender, the employee signs the company’s tender or repurchase documents. The company (or its designated purchaser) signs as buyer. Outside LPs do not sign the stock power. If the designated buyer is an employee benefit plan, ERISA fiduciary rules can apply; the Department of Labor describes ERISA as the federal statute that sets minimum standards for most private-industry retirement and health plans (DOL ERISA overview, fetched 2 Sep 2026). Most ordinary issuer tenders are not plan transactions. If yours is, stop and use benefits counsel. This page is not that memo.
In a secondary SPV, three signature stacks run in parallel:
LPs subscribe to the SPV (subscription agreement, operating agreement).
The SPV and each seller sign a stock purchase agreement (or joinder to a form SPA).
The company signs a consent, waiver of ROFR, or transfer-agency instruction — or it exercises ROFR and the SPV never takes the shares.
The sponsor does not get to skip step 3 because the LPs are in a hurry. Transfer restrictions in the option plan, stockholders’ agreement, and bylaws still bind the shares.
SEC resale conditions (Rule 144 and, for compensatory issuances, the Rule 701 disclosure overlay) are issuer- and holder-specific. Do not announce that “Rule 144 is done” in a deal email without counsel reading the file.
Who KYCs
Tender. The company already knows the employee. KYC on the buyer side is internal: the treasury, the designated purchaser, or a plan trustee. Employees are usually not onboarded as “investors.” They are sellers in an issuer program. The company may still collect wire instructions, tax forms (W-9 / W-8), and 83(b) or basis records.
Secondary SPV. The SPV must KYC and, for a Regulation D offering of SPV interests, verify accreditation of LPs. Sellers are counterparties. Banks will still CIP the vehicle and, often, look through control persons. If Allocations administers the vehicle, investor KYC/AML sits in the same onboarding flow as other SPVs.
Brokered secondary. Customers of Allocations Securities, LLC complete BD onboarding and accredited-investor verification. Approval is required; access may be declined. That KYC is for the ATS or brokerage relationship, not a substitute for SPV LP KYC if you also form a vehicle.
Sellers who are current employees can fail bank or BD KYC for ordinary reasons (expired passport, sanctioned jurisdiction, name mismatch with the cap table). Build time for that. Do not promise a wire date in the all-hands deck.
Cap-table impact (high level)
A company repurchase removes shares (or holds them as treasury, depending on charter and Delaware or other state corporate law). Headcount of holders may drop. Option pools and fully diluted math move. The board should know whether the purchase is funded from the balance sheet and how it interacts with a priced round.
A designated-purchaser tender (affiliate, SPV the company formed, or employee vehicle the company controls) replaces employee lines with one buyer line, or with however many designated buyers the program names. The company picked the buyer, so the new line is a known party.
A third-party secondary SPV also aims for one new line: the SPV. That is the usual pitch in what are secondary SPVs. The company may refuse the SPV, cap the number of underlying LPs it will look through, or require the SPV to be a single-member entity. Some issuers only allow transfers to existing investors. Read the stockholders’ agreement before you market the SPV.
An SMA or individual buyer puts the buyer’s legal name on the cap table. Ten buyers is ten lines. That is why companies prefer a tender or a single SPV.
Market volume is covered in venture secondaries in 2026. Do not infer a price for any employer from that article.
Company-run tender | Buyer-side secondary SPV | |
|---|---|---|
Who sets the window | The company / board | Sponsor + whatever transfer window the company will allow |
Who signs as buyer | Company or designated purchaser | The SPV |
Who KYCs as investor | Generally not the employees; buyer is internal | LPs of the SPV (and BD customers if brokered) |
Who KYCs as seller | Employees as payees / tax forms | Employees as SPA counterparties; bank may still CIP |
Cap-table result | Shares retired or moved to a company-chosen buyer | One SPV line if the company accepts the transfer |
Employee holding vehicle | Optional; only if the plan allows a pre-sale transfer to an employee LLC | Same constraint on the seller side |
Illiquidity after the trade | Remaining employee shares stay private and restricted | SPV interests stay private and restricted |
Fees you can actually quote
If the buyer is an Allocations SPV, published formation prices apply: Standard SPV $9,950 one-time (VC asset type, 35 investors, one close); Premium SPV $19,500 one-time when the asset type is secondaries or another non-standard asset (50 investors, extra closes $2,000). Extra investors +$100. Platform carry 0%. Banking included. Distributions later: Standard $5,000; Premium $12,000 + $0.075/share; Custom $12,000 + $0.10/share (fees, fetched 2 Sep 2026). Additional fees may apply.
If the trade is brokered by AllocationsX, no ATS or ticket fee is published on that fees page as of 2 Sep 2026. Contact the desk. Do not invent a number.
Company tender costs (counsel, 409A, transfer-agent, any plan fees) are the company’s. They are not Allocations SKUs.
What not to tell employees
Do not tell them the tender “sets fair market value” for tax. 409A, 83(b), and withholding are a different file.
Do not tell them a secondary SPV is “the same as an IPO.” They will hold cash from the sale, or they will hold restricted SPV interests if they rolled. Those interests are illiquid.
Do not name a broker-dealer order as a company program. If Allocations Securities, LLC is in the flow, say so, point to BrokerCheck, and keep the not-an-offer sentence.
Do not skip ROFR in the employee FAQ. If the company can take the shares, the SPV’s LPs may fund into a broken deal. Broken-deal expense allocation belongs in the operating agreement before you launch.
Is a tender the same as a secondary SPV?
No. A tender is a company-run purchase of employee shares by the issuer or a buyer it designates. A secondary SPV is a third-party vehicle that buys existing shares, subject to consent and ROFR. Both can put cash in an employee account. They are different counterparties and different cap-table events.
Who appears on the cap table after a secondary SPV closes?
If the company accepts the transfer, the SPV appears as the shareholder, not each LP. If the company rejects the SPV or exercises ROFR, the SPV may never appear. Confirm in the stockholders’ agreement.
Do employees KYC as investors in a company tender?
Usually no. They are sellers in an issuer program. They still complete tax and payment forms. LPs in a buyer-side SPV do KYC as investors in the vehicle.
Can I hold the shares in an employee LLC first?
Sometimes, if the equity plan and the company allow an affiliate or estate-planning transfer. That is a holding structure, described in the employee LLC insight. It is not itself a tender and not an offer of liquidity.
Is this an offer to buy employee shares?
No. Private securities are illiquid. Any actual purchase happens only in definitive documents, with company consent where required. If a broker-dealer is used, Allocations Securities, LLC dba AllocationsX (FINRA/SIPC, CRD 317750) is the BD for that secondary market.
Employee Liquidity: Tender vs Secondary SPV
A company-run tender is the issuer (or a designated buyer) offering to purchase employee shares on stated terms. A buyer-side secondary SPV pools capital and buys existing shares from holders. They differ on who signs, who KYCs, and who ends up on the cap table.
This page is not an offer or solicitation to buy or sell any security. Private-company securities are illiquid. Transfers usually need company consent and may be blocked by ROFR, right of first offer, or plan restrictions. Nothing here is investment, legal, or tax advice. No company names or valuations.
Employee tender vs secondary SPV
Employees hold vested common, early-exercise shares, or option shares they have already paid tax on. They want cash before an IPO or sale. The company wants orderly process, a clean cap table, and no stray buyers in the data room.
Company-run tender. The board authorizes a purchase window. The buyer is the company (treasury repurchase) or a named affiliate, employee fund, or designated purchaser. Employees elect into the program, sign issuer paperwork, and sell up to a cap at a price the company sets for that window. Unsold shares stay on the employee’s account.
Buyer-side secondary SPV. A sponsor forms an SPV, raises from LPs, and the SPV contracts with one or more employee-sellers. The company is not the buyer. The company is the gate: consent, ROFR, cap-table admin, sometimes a co-sale or transfer-window policy. Structuring steps are in how to set up a secondary SPV and the definition in what are secondary SPVs.
A third structure — the employee holding their own equity in an employee LLC — is a holding wrapper, not a liquidity program. It can sit on either path if the plan allows an affiliate transfer before the sale. It does not replace consent.
If a broker-dealer intermediates a matched secondary, AllocationsX is the BD for that market: Allocations Securities, LLC dba AllocationsX, member FINRA/SIPC, CRD 317750. Check BrokerCheck. That is a channel, not a tender. Private shares remain illiquid. It is not an offer.
Who signs
In a tender, the employee signs the company’s tender or repurchase documents. The company (or its designated purchaser) signs as buyer. Outside LPs do not sign the stock power. If the designated buyer is an employee benefit plan, ERISA fiduciary rules can apply; the Department of Labor describes ERISA as the federal statute that sets minimum standards for most private-industry retirement and health plans (DOL ERISA overview, fetched 2 Sep 2026). Most ordinary issuer tenders are not plan transactions. If yours is, stop and use benefits counsel. This page is not that memo.
In a secondary SPV, three signature stacks run in parallel:
LPs subscribe to the SPV (subscription agreement, operating agreement).
The SPV and each seller sign a stock purchase agreement (or joinder to a form SPA).
The company signs a consent, waiver of ROFR, or transfer-agency instruction — or it exercises ROFR and the SPV never takes the shares.
The sponsor does not get to skip step 3 because the LPs are in a hurry. Transfer restrictions in the option plan, stockholders’ agreement, and bylaws still bind the shares.
SEC resale conditions (Rule 144 and, for compensatory issuances, the Rule 701 disclosure overlay) are issuer- and holder-specific. Do not announce that “Rule 144 is done” in a deal email without counsel reading the file.
Who KYCs
Tender. The company already knows the employee. KYC on the buyer side is internal: the treasury, the designated purchaser, or a plan trustee. Employees are usually not onboarded as “investors.” They are sellers in an issuer program. The company may still collect wire instructions, tax forms (W-9 / W-8), and 83(b) or basis records.
Secondary SPV. The SPV must KYC and, for a Regulation D offering of SPV interests, verify accreditation of LPs. Sellers are counterparties. Banks will still CIP the vehicle and, often, look through control persons. If Allocations administers the vehicle, investor KYC/AML sits in the same onboarding flow as other SPVs.
Brokered secondary. Customers of Allocations Securities, LLC complete BD onboarding and accredited-investor verification. Approval is required; access may be declined. That KYC is for the ATS or brokerage relationship, not a substitute for SPV LP KYC if you also form a vehicle.
Sellers who are current employees can fail bank or BD KYC for ordinary reasons (expired passport, sanctioned jurisdiction, name mismatch with the cap table). Build time for that. Do not promise a wire date in the all-hands deck.
Cap-table impact (high level)
A company repurchase removes shares (or holds them as treasury, depending on charter and Delaware or other state corporate law). Headcount of holders may drop. Option pools and fully diluted math move. The board should know whether the purchase is funded from the balance sheet and how it interacts with a priced round.
A designated-purchaser tender (affiliate, SPV the company formed, or employee vehicle the company controls) replaces employee lines with one buyer line, or with however many designated buyers the program names. The company picked the buyer, so the new line is a known party.
A third-party secondary SPV also aims for one new line: the SPV. That is the usual pitch in what are secondary SPVs. The company may refuse the SPV, cap the number of underlying LPs it will look through, or require the SPV to be a single-member entity. Some issuers only allow transfers to existing investors. Read the stockholders’ agreement before you market the SPV.
An SMA or individual buyer puts the buyer’s legal name on the cap table. Ten buyers is ten lines. That is why companies prefer a tender or a single SPV.
Market volume is covered in venture secondaries in 2026. Do not infer a price for any employer from that article.
Company-run tender | Buyer-side secondary SPV | |
|---|---|---|
Who sets the window | The company / board | Sponsor + whatever transfer window the company will allow |
Who signs as buyer | Company or designated purchaser | The SPV |
Who KYCs as investor | Generally not the employees; buyer is internal | LPs of the SPV (and BD customers if brokered) |
Who KYCs as seller | Employees as payees / tax forms | Employees as SPA counterparties; bank may still CIP |
Cap-table result | Shares retired or moved to a company-chosen buyer | One SPV line if the company accepts the transfer |
Employee holding vehicle | Optional; only if the plan allows a pre-sale transfer to an employee LLC | Same constraint on the seller side |
Illiquidity after the trade | Remaining employee shares stay private and restricted | SPV interests stay private and restricted |
Fees you can actually quote
If the buyer is an Allocations SPV, published formation prices apply: Standard SPV $9,950 one-time (VC asset type, 35 investors, one close); Premium SPV $19,500 one-time when the asset type is secondaries or another non-standard asset (50 investors, extra closes $2,000). Extra investors +$100. Platform carry 0%. Banking included. Distributions later: Standard $5,000; Premium $12,000 + $0.075/share; Custom $12,000 + $0.10/share (fees, fetched 2 Sep 2026). Additional fees may apply.
If the trade is brokered by AllocationsX, no ATS or ticket fee is published on that fees page as of 2 Sep 2026. Contact the desk. Do not invent a number.
Company tender costs (counsel, 409A, transfer-agent, any plan fees) are the company’s. They are not Allocations SKUs.
What not to tell employees
Do not tell them the tender “sets fair market value” for tax. 409A, 83(b), and withholding are a different file.
Do not tell them a secondary SPV is “the same as an IPO.” They will hold cash from the sale, or they will hold restricted SPV interests if they rolled. Those interests are illiquid.
Do not name a broker-dealer order as a company program. If Allocations Securities, LLC is in the flow, say so, point to BrokerCheck, and keep the not-an-offer sentence.
Do not skip ROFR in the employee FAQ. If the company can take the shares, the SPV’s LPs may fund into a broken deal. Broken-deal expense allocation belongs in the operating agreement before you launch.
Is a tender the same as a secondary SPV?
No. A tender is a company-run purchase of employee shares by the issuer or a buyer it designates. A secondary SPV is a third-party vehicle that buys existing shares, subject to consent and ROFR. Both can put cash in an employee account. They are different counterparties and different cap-table events.
Who appears on the cap table after a secondary SPV closes?
If the company accepts the transfer, the SPV appears as the shareholder, not each LP. If the company rejects the SPV or exercises ROFR, the SPV may never appear. Confirm in the stockholders’ agreement.
Do employees KYC as investors in a company tender?
Usually no. They are sellers in an issuer program. They still complete tax and payment forms. LPs in a buyer-side SPV do KYC as investors in the vehicle.
Can I hold the shares in an employee LLC first?
Sometimes, if the equity plan and the company allow an affiliate or estate-planning transfer. That is a holding structure, described in the employee LLC insight. It is not itself a tender and not an offer of liquidity.
Is this an offer to buy employee shares?
No. Private securities are illiquid. Any actual purchase happens only in definitive documents, with company consent where required. If a broker-dealer is used, Allocations Securities, LLC dba AllocationsX (FINRA/SIPC, CRD 317750) is the BD for that secondary market.
Addhyan Negi
Director of Marketing, Allocations
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Allocations secondary market is operated through Allocations Securities, LLC dba AllocationsX, member FINRA/SIPC. Check this firm on FINRA BrokerCheck. Allocations Securities, LLC is a wholly owned subsidiary of Allocations, Inc.
Copyright © Allocations Inc
Allocations secondary market is operated through Allocations Securities, LLC dba AllocationsX, member FINRA/SIPC. Check this firm on FINRA BrokerCheck. Allocations Securities, LLC is a wholly owned subsidiary of Allocations, Inc.
Copyright © Allocations Inc
Allocations secondary market is operated through Allocations Securities, LLC dba AllocationsX, member FINRA/SIPC. Check this firm on FINRA BrokerCheck. Allocations Securities, LLC is a wholly owned subsidiary of Allocations, Inc.
Copyright © Allocations Inc