Tender Offer Checklist: Numbers to Check Before Selling Vested ESOPs

The trap is selling the wrong slice

You have vested ESOPs, and a company is asking you to tender part of them. A tender offer gives cash now, but only for a capped slice; the company sets the price, the cap, and the deadline.

Temple priced its employee buyback at $375 million, close to twice the roughly $190 million post-money seed valuation, the company value after the seed round, disclosed in February 2026. The employee price stayed below the $500 million mark that founder Deepinder Goyal said in an internal memo was attracting strong external investor interest before the next round. The gap is what to check before signing: a tender offer is a partial sale, not an exit.

Temple set up a liquidity mechanism allowing a subset of early staff to sell part of vested options. The programme was optional, allowing eligible staff to keep their vested options rather than sell. The choice is the core of every tender offer: take cash now, or hold for a later, larger exit. The trap is treating the offer as a win because the company is growing. The rule is simpler: sell only the amount you can justify with your cash need, the cap, and the math on what remains.

Do not let the word liquidity make the decision for you. A liquidity event can be a partial sale, a full exit, a buyback, or a transfer. In a tender offer, the company is usually buying back a limited amount of shares from selected holders. Your decision should come from the terms in front of you, not from the label.

The checklist separates company terms from your cash need

Each question is quick to answer if you have the offer terms in front of you. It forces you to compare today’s cash against the value you keep.

• What percentage of vested equity can you sell? Write the cap, the vested amount, and the maximum cash before tax.
• At what valuation is the company buying back shares? Compare that price to the last known round and any stated future interest.
• What happens to the unsold portion? Confirm it stays outstanding, remains subject to future dilution, and is not forfeited.
• How much dilution is likely in the next round? Estimate how much your remaining shares will shrink if the company raises again before you exit.
• Do you need the cash now, after exercise cost and taxes, or can you hold for a higher exit?

The checklist keeps the decision practical by separating the company’s terms from your personal cash need. If the offer terms are unclear, ask for the number of shares being tendered, the price per share, the exercise price, the tax treatment, and the deadline. A short answer is enough. If the company cannot give you those terms, treat the offer as incomplete.

To run the sell-versus-hold math, compare the capped cash after exercise cost and taxes with the value of the shares you keep, adjusted for the next round’s likely dilution. If the cash does not change your situation, the hold case gets stronger.

Say yes when the cash changes your life, the price is close to the next likely round, and the cap leaves enough shares for meaningful upside. Say no when the cash is optional, the price is well below the next likely round, and the remaining shares are likely to be diluted heavily.

Temple’s numbers show why the cap matters

Roughly 20 employees, from a workforce estimated at 200 to 220, could tender up to 25% of vested ESOPs, leaving at least 75% of those vested ESOPs outstanding. That cap is a checklist number: it tells you how much upside you keep.

Temple's seed round brought in $54 million from a group that included Steadview Capital, Peak XV Partners, Dharana Capital, Info Edge, and NKSquared. The investor group shows who already believes in the next step. The price gap measures how much room may be left before the next round. The employee cap limits how much of your upside you can sell today.

Temple's transaction was an early-stage ESOP buyback, a type of employee liquidity event that is relatively rare and often priced below the company's most recent funding valuation. That rarity makes the terms worth checking, not just accepting.

The checklist does not pick for you. For an employee, the decision turns on whether the capped cash is useful now, whether the price is fair, and whether the remaining shares can survive dilution. Write the answer down before you sign.