Most people selling stock in a private company start by asking what their shares are worth. The better first question is whether the shares can be transferred at all, and on whose timeline. There is no exchange and no ticker: a sale is a private transaction that has to clear the company's own transfer rules before it closes. Price is the second thing you settle, not the first.
Read your stockholder agreement and the company's governing documents before you negotiate: the right of first refusal and any company or board consent requirement decide whether a sale can happen. Options generally must be exercised before the shares can be sold, so confirm the transfer path before you exercise. Expect common stock to price below the latest preferred round. Waiting for an IPO has a cost, a tender offer runs on the company's terms, and the best offer is the one most likely to close.
How can I sell private company stock before an IPO?
Sell to a secondary buyer, through a broker or platform, or in a company-run tender offer. Every route must clear your stockholder agreement's right of first refusal and any company consent, and options must be exercised before the shares can be sold. To resell under SEC Rule 144, restricted shares of a company that does not file SEC reports generally must be held for at least one year.
Can you sell stock in a private company?
Usually, yes. Securities law sets the limits; your company's documents decide the outcome.
The SEC notes that securities of privately held companies may not be freely traded, and that shares acquired in private sales are often "restricted securities." The SEC lists private placements and employee stock benefit plans among the ordinary ways founders, employees, and early investors receive restricted stock. Those shares can still be resold, but only through an exemption from registration. Under SEC Rule 144, for example, restricted securities of a company that does not file reports with the SEC must generally be held for at least one year, and the SEC's private secondary markets guidance identifies Section 4(a)(7) as another resale pathway.
Read your documents before you negotiate
A price on shares the company will not let you transfer is worth nothing. The transfer provisions, not the bid, decide whether a private sale happens.
The terms usually sit in your stock purchase or grant agreement, the company's bylaws, and, at many venture-backed companies, a separate transfer agreement. The National Venture Capital Association's widely used model financing documents include a dedicated Right of First Refusal and Co-Sale Agreement, which shows how standard these provisions are.
Company approval is the term that matters most. FINRA cautions that many private companies require that the company approve any transfer of their shares, and that without that approval a transaction might be void. Some go further: as one startup law firm describes, companies can prohibit resales without board consent. Before you take a call about price, you should be able to answer these from your own paperwork:
- Are you holding vested shares, or options?
- Who holds a right of first refusal, and how long do they have to decide?
- Does the company or its board have to approve the transfer?
- Does your grant or employment agreement impose a lockup or prohibit transfer outright?
If your paperwork does not answer them, ask the company before you ask anyone for a price.
The right of first refusal
Most stockholder agreements give the company, and sometimes its existing investors or assignees, a right of first refusal (ROFR). Once you have a buyer and agreed terms, you notify the company, which then has the option to buy the shares itself at the same price and terms offered by the third-party buyer. The company typically has a specified period to decide, often 30 days, as set out in the agreement. A ROFR is a right, not an obligation: if the company and any other holders decline, the sale can proceed to your buyer on the terms you notified. These provisions exist mainly to let the company control its cap table.
A ROFR does not by itself stop a sale, but it shapes the offers you get. A buyer who agrees a price with you is setting terms the company can take for itself, and then waiting to find out whether it will. Buyers may price in both the wait and the chance of losing the deal.
Lockups, legends, and company consent
Some shares are subject to lockup periods or are expressly non-transferable under an employment or grant agreement; some restrictions expire or have exceptions. Restricted stock also usually carries a legend stating that it cannot be resold publicly without an exemption, and the SEC explains that only a transfer agent can remove a restrictive legend, and that it will not do so without the issuer's consent. The company is involved at the end of a sale as well as at the start.
Waiting for the IPO is also a bet
Holding is not the neutral choice. It keeps a concentrated, illiquid position for an unknown period in exchange for the chance of a better price later. That can be right, but make it on purpose.
The median age of U.S. companies at IPO was 14 years in 2024 and 12 years in 2025, according to University of Florida IPO researcher Jay Ritter's database, roughly double the 5-to-9-year norm through the 1990s and 2000s. Those figures count only companies that went public. Planning around an IPO assumes yours will be one of them, on a timeline that has roughly doubled.
People who sell before an IPO have rarely given up on the company. More often they are founders diversifying without exiting, early employees with ordinary needs such as a home purchase, or angel investors redeploying into the next bet. Selling a percentage is a hedge, not a vote of no confidence. A partial sale goes through the same ROFR and approval steps as a full one.
Options: confirm the exit before you exercise
Exercising costs cash and can create tax before you know the shares can be sold. Settle the transfer question first.
An option is a right to buy shares, and incentive stock options (ISOs) must by law be non-transferable other than by will or the laws of descent and distribution. Option holders therefore generally exercise first and then sell the resulting shares, subject to the same ROFR and consent provisions as any other stockholder. According to IRS Topic 427:
- Nonstatutory options. For most options without a readily determinable value, you include in income at exercise the fair market value of the stock received, less the amount paid.
- Incentive stock options. You generally do not include an amount in gross income when you exercise for regular tax purposes, but you may be subject to the alternative minimum tax in the year of exercise.
- Holding periods. If you do not meet the special holding period requirements for ISO shares, income from the sale is treated as ordinary income. The statute sets those periods at 2 years from the grant date and 1 year from the transfer of the shares to you.
The order matters. If you exercise to sell and then find the transfer blocked, you may have paid the exercise price and taken on income or alternative minimum tax exposure for shares you still cannot sell. How these rules apply depends on your circumstances, so please consult your tax adviser before exercising or selling. Nothing here is tax advice.
Pricing: reference points, not offers
The 409A valuation and the last preferred round price are where the conversation starts. Neither is what a secondary buyer will pay.
The 409A valuation is the figure used to set option exercise prices. Treasury regulations require the fair market value of stock that is not readily tradable to be determined by the reasonable application of a reasonable valuation method, and an independent appraisal as of a date no more than 12 months before the relevant transaction is presumed reasonable. The preferred price is what investors paid for a different security. Common shares sit below the liquidation preferences of preferred stock and typically lack its governance rights, and buyers price in the transfer process and the lack of a near-term exit. As a result, common stock typically trades at a discount to the latest preferred round price, and every position is priced individually.
The useful question is not whether there is a discount but what it buys you: how certain the close is, and how soon.
A tender offer is the company's liquidity, on the company's terms
Some companies run periodic programs that let employees and other holders sell vested equity, either back to the company or to outside investors the company has lined up. A tender offer must be authorized by the company's board, and federal tender offer rules apply even to private companies: Rule 14e-1(a) generally requires an offer to stay open for at least 20 business days, although a 2026 SEC exemptive order permits shorter periods for qualifying issuer tender offers.
Because the company authorizes the program and lines up the buyers, the timing and terms are the company's. If your company runs one, it may well be the simplest route, with the company's consent built in. Just do not mistake its price for a market price: it is one data point from one source, not evidence of what your shares would fetch elsewhere. And if your company does not run one, you cannot make one happen.
Platforms, brokers, and direct buyers
Outside a tender, you choose between an intermediary and a principal. The better choice depends on how actively your company's shares trade.
Secondary platforms and brokers. Intermediaries match sellers with buyers. Where shares trade actively, competition among buyers may produce a higher price. The transaction still has to pass through the company's ROFR and approval process, and the intermediary sits between you and the eventual purchaser.
Direct buyers. A principal buyer purchases the shares for its own account, so you deal with one counterparty from first review through closing. The trade a principal usually offers is a single counterparty and a defined process in exchange for a discount to the latest preferred price. The ROFR and company approval still apply, so ask what certainty you are actually getting.
The best offer is the one that closes
The highest headline number is not the best bid if it carries conditions the others do not. Compare offers by how likely they are to turn into cash, then by price.
An early indication of interest is typically non-binding until documents are signed, and every private sale is subject to the ROFR and any required company approval. Those conditions are common to every bid. Ask each bidder about the rest:
- Are you buying for your own account, or do you still need to find the end buyer?
- Beyond the ROFR and company approval, what conditions remain before you are committed?
- What happens to the price if the company's process runs longer than expected?
A lower bid with no conditions beyond the company's own process can be worth more than a higher one that depends on things neither of you controls.
How long does a sale take?
The timeline is set mostly by the company, not the buyer. It depends on how quickly documents can be gathered, the ROFR period in your agreement, whether the company or board must approve the transfer, and how responsive the company is in recording it. MicroVentures notes that ROFR processes alone can draw out a transaction considerably.
The part you control is the start: have your stockholder agreement, stock certificate or option grant documents, any company financial information you have received, and share class details ready.
Where to start
Documents first, then a deliberate decision about how much to hold, then price. If you would like a principal to look at a specific position, ABC Liquidity reviews private company stock individually and, where it fits, provides a non-binding indication of interest.
Sources: U.S. Securities and Exchange Commission guidance on private secondary markets and Rule 144; FINRA's investor insight on pre-IPO investments; IRS Topic 427, 26 U.S.C. § 422, and 26 CFR § 1.409A-1; Carlton Fields on employee tender offer programs (April 2026); MicroVentures on rights of first refusal; and Jay Ritter's IPO age data. This article is general information, not legal or tax advice. Last updated: November 2026.