How to Sell Private Company Stock

Selling private company stock is not like selling shares on a public exchange. There is no ticker symbol, no instant execution, and no guarantee of a buyer at any given price. But for employees and shareholders who hold vested, exercised shares in a late-stage private company, selling on the secondary market is one of the most direct paths to real liquidity.

This guide walks through the entire process — who is eligible, how to navigate transfer restrictions, how secondary marketplaces work, and what to consider before you list.

1. Who can sell

Not everyone who holds equity in a private company can sell on the secondary market. The key distinction is between shares you own and equity that has not yet converted into shares.

You can typically sell:

• Shares from exercised stock options (ISOs or NSOs) — you paid the strike price and now hold actual shares
• Shares from settled RSUs — the vesting conditions have been met and shares have been issued to you
• Shares acquired through early exercise or founder grants

You generally cannot sell:

• Unexercised stock options — these are a right to buy shares, not shares themselves. You need to exercise first, which means paying the strike price and (for NSOs) the associated taxes.
• Unvested RSUs — until both vesting conditions are met (and for double-trigger RSUs, both triggers), no shares have been issued to you.
• Unvested shares subject to repurchase — some early-exercise agreements give the company a repurchase right on unvested portions.

Before anything else, pull up your equity agreement and your cap table administrator (such as Carta, Pulley, or Shareworks) to confirm exactly what you own and what is transferable.

2. Check your transfer restrictions

Even if you hold actual shares, your company may restrict your ability to sell. Most private companies include transfer restrictions in their equity agreements and bylaws. These are the main ones to understand:

Right of first refusal (ROFR)

This is the most common restriction. A ROFR gives the company (and sometimes existing investors) the right to buy the shares at the same price before an outside buyer can. If the company exercises its ROFR, you still get your sale — just to a different buyer. If they waive it, the transaction proceeds with the outside buyer. ROFR review typically takes 30 days.

Board approval

Many companies require board approval for any share transfer. This is sometimes a formality and sometimes a real gatekeeper. Companies that are actively supporting secondary liquidity tend to approve transfers more readily. Companies that are not may slow-walk or deny requests.

Blackout periods

Some companies impose trading blackout windows around earnings, funding rounds, or other material events. If you are subject to a blackout, you may need to wait until the window opens.

Lock-up agreements

If you signed a lock-up (common around tender offers or late-stage funding rounds), you may be restricted from selling for a defined period, typically 90 to 180 days.

The best way to check your restrictions is to review your stock purchase agreement, the company's bylaws, and any transfer policy documents. If you are unsure, ask your company's equity administration or legal team directly.

3. The secondary market landscape

Several platforms facilitate secondary sales of private company stock. The major ones include:

• Hiive — a FINRA-registered Alternative Trading System (ATS) and the largest secondary marketplace by liquidity. Hiive connects sellers directly with institutional and accredited buyers and provides market data to help with pricing.
• Forge Global — a publicly traded secondary marketplace that also operates as a registered broker-dealer.
• EquityZen — a platform that pools investor capital into funds that buy employee shares, typically in structured SPVs.
• Nasdaq Private Market — primarily focused on company-sponsored liquidity programs and tender offers rather than individual seller-initiated transactions.

The most important factor in choosing a platform is liquidity — that is, whether there are actual buyers for your specific company's shares at a reasonable price. A listing with no buyers is just a waiting game. Hiive tends to have the deepest buyer pool for late-stage private companies, which means a higher probability that your trade actually closes.

4. How selling on Hiive works, step by step

Here is what the process typically looks like when selling through Hiive:

Step 1: Create an account and verify your identity

You will need to provide basic personal information and verify your identity. As a FINRA-regulated ATS, Hiive is required to perform KYC (know-your-customer) checks.

Step 2: List your shares

You specify the company, the number of shares you want to sell, your share class (e.g., common), and your asking price per share. You can also indicate flexibility on price. Hiive provides market data and recent transaction context to help you set a realistic ask.

Step 3: Get matched with buyers

Hiive connects your listing with its network of institutional buyers, funds, and accredited investors who are actively looking for exposure to your company. Because Hiive operates as an ATS, it can facilitate price discovery and match orders more efficiently than informal broker networks.

Step 4: Negotiate and agree on terms

Once a buyer is interested, you agree on price, share count, and terms. Hiive facilitates this process and handles the transaction documentation.

Step 5: Company review and ROFR

The company is notified of the proposed transfer. If the company has a ROFR, they typically have 30 days to decide whether to exercise it. If they waive the ROFR (or do not have one), the transfer moves forward.

Step 6: Settlement and fund transfer

Once the company approves the transfer, shares are transferred on the cap table and funds are wired to you. The full process from listing to cash in hand typically takes 30 to 60 days, depending on how quickly a buyer match is made and how long the company takes to review.

Ready to explore your options? Talk to a Hiive specialist to get a sense of what your shares might be worth.

5. Pricing your shares

Pricing private company stock is more art than science, but there are several reference points to anchor your expectations:

Last funding round valuation

The most recent preferred stock price from a funding round is a starting point, but it is not the price you should expect. Preferred shares carry rights (liquidation preferences, anti-dilution protections) that common shares do not. As a result, common stock typically trades at a discount to the preferred price.

409A valuation

The company's 409A fair market value is the IRS-compliant valuation used for option strike prices. It is usually significantly lower than the preferred price because it reflects the value of common stock specifically. While not a market price, it provides a floor reference.

Secondary market comps

What have other sellers received for shares in the same company recently? Platforms like Hiive show market data, including recent transaction prices and current bid-ask spreads, which can give you a realistic sense of where the market actually is.

General pricing guidance

• Employee common shares typically trade at a 20-40% discount to the last preferred round price, though the range varies widely
• High-demand companies (those approaching IPO or with strong revenue growth) may trade closer to the preferred price
• Companies with uncertain timelines or declining fundamentals may see steeper discounts
• Setting an unrealistic ask price is the fastest way to get no bids — price to the market, not to your hopes

6. Tax implications

Selling private stock triggers a taxable event. The tax treatment depends on what kind of equity you hold and how long you have held the shares. For a deeper dive, see our capital gains tax guide.

Short-term vs. long-term capital gains

If you have held your shares for more than one year from the date of exercise (or acquisition), gains are taxed at the long-term capital gains rate, which is significantly lower than ordinary income tax rates for most people. Shares held for one year or less are taxed as short-term gains at your ordinary income rate.

Cost basis

Your cost basis is what you paid for the shares. For exercised options, this is typically the strike price times the number of shares. For RSUs, the basis is usually the fair market value at the time of settlement (which was already taxed as income). Keeping accurate records of your exercise or settlement dates and prices is critical.

ISO-specific considerations

If you exercised incentive stock options, the holding period rules are stricter. To qualify for long-term capital gains treatment, you generally need to hold the shares for at least two years from the grant date and one year from the exercise date. Selling before both periods are met triggers a disqualifying disposition, and the spread at exercise is taxed as ordinary income. Also, if you exercised ISOs and the spread was large, you may have already triggered AMT — factor that into your planning.

NSO considerations

For non-qualified stock options, you already paid ordinary income tax on the spread at exercise. Your basis is the fair market value at that time. Any additional gain from there to your sale price is a capital gain (short or long term depending on holding period).

The bottom line: talk to a tax advisor before selling. The difference between long-term and short-term treatment on a large block of shares can be tens of thousands of dollars.

7. How much to sell

One of the hardest decisions is not whether to sell, but how much. This is the concentration-versus-upside tradeoff.

The case for selling some

• If more than 25-50% of your net worth is in one private company, you are carrying meaningful concentration risk
• Partial liquidity lets you reduce risk, cover taxes, fund life goals, or diversify — without giving up all your upside
• You lock in some real return instead of leaving everything to an uncertain IPO timeline

The case for holding

• If you have high conviction in the company's trajectory and a strong balance sheet otherwise, the opportunity cost of selling may be real
• Selling at a discount to the preferred price means giving up shares below what they might be worth at IPO

A simple framework

Think in terms of "how much do I need?" rather than "what is the maximum I could sell?" Many employees find that selling 20-40% of their position provides meaningful risk reduction and liquidity while preserving most of their upside. Others sell enough to cover the cost of exercise and associated taxes, then hold the rest. There is no universally right answer — it depends on your financial situation, risk tolerance, and how much conviction you carry.

8. Common mistakes

• Waiting too long after leaving. If you leave a company with unexercised options, you typically have a post-termination exercise period (PTEP) of 90 days for ISOs. Miss that window and your options expire worthless — regardless of how valuable the shares are.
• Not checking ROFR and transfer restrictions first. Sellers sometimes find a buyer and agree on a price, only to discover their company will not approve the transfer. Check the rules before you list.
• Forgetting about AMT. If you exercised ISOs in a prior year and the spread was large, you may already owe AMT. Factor this into your sale planning and tax projections.
• Setting an unrealistic price. Pricing shares at or above the last preferred round and refusing to negotiate is the most common reason trades do not close. The secondary market has its own supply and demand dynamics.
• Selling too much in a panic. Market uncertainty or bad press can drive emotional decisions. If the company's fundamentals have not changed, dumping your entire position at a steep discount may not be the right move.
• Selling too little out of optimism bias. On the other side, employees who hold 100% of their position through an extended pre-IPO period are taking a concentrated bet that may or may not pay off. Some diversification is usually prudent.
• Not understanding your share class. Common shares, preferred shares, and different series can have very different rights and values. Know exactly what you hold.

9. Questions to ask before selling

Before listing your shares, work through this checklist:

1. What exactly do I own? Shares, vested options that need exercising, or unvested equity?
2. What are my company's transfer restrictions? ROFR, board approval, blackout windows?
3. What is my cost basis? What did I pay (or what was the FMV at settlement for RSUs)?
4. What is my holding period? Am I past the one-year mark for long-term capital gains?
5. Do I have ISO holding period requirements? Two years from grant and one year from exercise?
6. How concentrated am I? What percentage of my net worth is tied to this one company?
7. What do I need the money for? Taxes, a home, diversification, or general liquidity?
8. What is the current secondary market price? Is there active buyer interest at a price I find acceptable?
9. Have I talked to a tax advisor? Do I understand the after-tax proceeds, not just the gross sale price?
10. What is my company's IPO timeline? Is a public listing likely in the near term, or is the horizon uncertain?

Final takeaway

Selling private company stock is a significant financial decision, but it does not need to be overwhelming. The process comes down to a few core steps: confirm you hold transferable shares, understand your company's rules, choose a marketplace with real liquidity, price your shares realistically, and plan for the tax consequences.

For most employee sellers, the secondary market through a regulated platform like Hiive is the most straightforward path. It provides access to institutional buyers, market data for pricing, and a structured process from listing to settlement.

The employees who navigate this well tend to share a few traits: they start early, they understand what they own, they consult a tax advisor, and they think about the sale as part of a broader financial plan rather than as an isolated transaction.

Related guides

• Tender Offers for Startup Employees
• Capital Gains Tax on Startup Shares
• What Is Equity?
• Private Company Stock Liquidity Guide

Sources and further reading

• SEC guidance on private securities transactions: sec.gov
• FINRA on Alternative Trading Systems: finra.org
• IRS guidance on capital gains and losses: irs.gov