Strategic Liquidity Planning: Considerations For Private Companies 

In today’s financial landscape, private companies are increasingly prioritizing strategic equity and liquidity management.¹ As businesses extend their private status, the demand for pre-IPO liquidity has surged, particularly among employees and early investors. This shift is reshaping how private companies align business goals with employee incentives and attract talent. 

The 2025 Liquidity Trends Report reveals that an overwhelming 99 percent of private company decision-makers view expanding stock plan value through liquidity options as essential. This need arises from the extended duration of private status and the challenges associated with delaying liquidity events. While 45 percent of larger private companies aim for an IPO, 39 percent prefer a tender offer due to its benefits, such as talent retention and shareholder control. 

For companies contemplating a liquidity event, it is important to be proactive with your liquidity strategy. This involves defining the goals of the liquidity program, addressing expiring equity awards and identifying potential buyers. A thorough understanding of transaction valuation, seller eligibility and tax implications can also be vital for success. 

Unique shareholder situations, such as expiring awards, may require careful attention. Companies remaining private longer may encounter challenges with double-trigger restricted stock units (RSUs) that vest only upon an IPO. Solutions can include removing the second vesting trigger or allowing partial vesting ahead of a liquidity event, often followed by a tender offer. 

Despite the popularity of tender offers, 33 percent of private companies feel unprepared for liquidity events, citing concerns over valuations and regulatory requirements. Focusing on transaction readiness and aligning stakeholders on strategic goals can help to prevent costly delays and ensure a smooth process. 

A strong liquidity strategy can align employee and investor incentives with business objectives. For more insights, download the 2025 Liquidity Trends: Perspectives from Private Company Leaders report. 

Who is Morgan Stanley at Work?

Morgan Stanley at Work  provides workplace financial benefits that help build financial confidence and foster loyalty—helping companies attract and retain talent. Our end-to-end offering spans Equity, Retirement, Deferred Compensation, Executive Services, and Saving and Giving Solutions. Each solution includes a powerful combination of modern technology, insightful support, and dedicated service, providing your employees with the knowledge and tools to help make the most of their benefits and achieve their life goals.    

Whether preparing for a liquidity event or an IPO, planning a release of restricted stock units, or expanding your equity plan, Morgan Stanley at Work can help you take charge of where you are today and where you’re going next. 

Disclosures 

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CRC 4868647 10/2025

1. ¹ “Liquidity Trends: Perspectives From Private Company Leaders,” Morgan Stanley at Work, 2025.  ↩︎