Tender Offer: Use the Strike-to-Tender Spread

The tender price is not the whole number

A tender offer puts a sell button on your vested options or shares, and the tempting number is the price the buyer will pay. The trap is treating that price as the only number. The rule is to compare your strike, or exercise price, to the tender price and the latest 409A valuation, the company's latest fair-market-value number, before you choose how much to sell.

A company-sponsored tender offer is a voluntary, time-limited buyout in which a company or investor group sets the price, eligibility, per-holder sale limits often tied to a percentage of vested shares, and a closing schedule, typically for at least 20 business days. On April 16, 2026, the SEC's corporate finance unit granted relief permitting issuer-led tenders to last just 10 business days instead of the usual 20, so long as the issuer or a wholly owned subsidiary is the buyer. That clock is why the worksheet needs to be ready before the offer feels urgent.

These offers are becoming a normal liquidity event, or a chance to sell, for startup employees. Carta's H1 2026 tender-offer activity reached 71 deals and $3 billion, exceeding the first-half totals seen in the prior five years. H1 2026 tender-offer deal count rose 34% and dollar volume rose about 200% versus H1 2025. NewView Capital and Carta announced a collaboration on September 22, 2026 to facilitate company-sponsored tender offers. More tenders mean more chances to make a mistake before the window closes and less time to fix it.

Two documents set the sell amount

Pull your grant and exercise history. Done looks like a table with grant date, exercise price, vested shares, exercised shares, and option type. Keep already exercised options separate from unexercised vested options, keep multiple grants on separate rows, and do not average the exercise prices. A later grant with a lower strike can change the tax flag and the cash you need to exercise.

Pair it with the latest 409A and the tender offer terms. You are done when one page shows the 409A price per share, the tender price, who is eligible, the per-holder cap, and the closing window. Write the per-holder cap as a formula, not just a number, because the offer documents set it. An older 409A creates a date gap, but the tax flag still depends on the latest 409A comparison.

The spread, tax flag, and proration cap set the limit

Calculate the strike-to-tender spread for each grant. For unexercised vested options, subtract the exercise price from the tender price and multiply by the number of vested unexercised shares. For shares you already own, use your cost basis, the amount you paid for the shares, instead of the exercise price. The column shows the cash you would receive before tax and the spread that drives the tax question.

Flag the tax treatment before you choose a size. For both nonqualified and incentive options, a same-day exercise-and-sell in a tender generally makes the spread ordinary compensation income rather than capital gain. A tender price above the 409A valuation can also cause some employee proceeds to be taxed as compensation instead of capital gain. Either flag turns the worksheet into a tax question, not just a cash question.

Apply the proration cap and any oversubscription rule. When more holders ask to sell than the buyer can buy, the offer may allocate shares pro rata, or in proportion to requests, so your requested amount can be reduced. Finish with a column that lists the maximum you can sell, the amount you request, and the amount you expect to receive. An oversubscribed offer can add another limit after the cap. Write both limits in the same column.

Choose a number that survives the window

Choose a sell amount that respects the cap and keeps the tax flag manageable. Start with the amount that clears your near-term cash needs, then test a smaller amount if the spread is large or the tender price is above the 409A. The signed worksheet includes the sell amount, expected cash, tax flag, and proration cap. If the tax flag is on, leave room for withholding before you sign. Keep the worksheet with the offer documents so you can defend the number and the tax flag if the window closes early.