An 11-year wait for IPOs pushes staff share sales into startup pay plans

The two Morningstar Indexes and PitchBook averages sit 4.1 years apart: 11 years in 2024 against 6.9 in 2014 ^[1][2][1]. Startups now stay private about 59% longer before a listing than they did a decade earlier ^[2]. Staff shares are typically sold at an IPO or an acquisition, according to Sifted, so employees now wait much longer to cash them in ^[15]. Kerrigan said many of the Moneybox staff the sale was meant to reward "have been with the business for up to 10 years" ^[5]. Ten years is one short of the 2024 average wait ^[3].

In a primary round a startup issues new shares to raise money for itself. In a secondary, employees sell existing equity to new buyers ^[3]. That definition settles who pays. On it, the 45 million pounds in Moneybox's sale ^[4] came from the buyers, so the company got cash to long-serving employees without spending its own. Nor did it have to list or sell itself early to do it ^[16]. The older routes included a one-off bilateral block trade negotiated with a single buyer, or a forced trade sale of the entire business to give early backers an exit ^[10].

Kerrigan, chief operating officer at Moneybox, said: "The money is on paper until you can actually deliver liquidity." ^[12] Matt Cooper, co-CEO of the private market investment platform Crowdcube ^[14], described what happens without it as "lock-in fatigue, where individuals are performing well and creating value for the company but are not getting the chance to realise some of the paper value they're creating." ^[11]

This can go two ways from here. Cooper's version is escalation. He calls it a "secondaries arms race" and said that the more businesses are explicit about their approach to employee liquidity, the more others will be forced to do it too ^[8]. He expects regular liquidity to become a "baseline expectation" at growth-stage companies ^[9], and Sifted reports that Revolut, Stripe and OpenAI already treat regular sales as a core part of compensation ^[7]. The founders' version is the worry that top performers cash out and leave ^[13]. Moneybox's answer was rationing: a limit on who could sell, a minimum time at the company and a cap on the percentage of shares each person could sell ^[6].

I think the pay-planning half of the case holds. Over an extra 4.1 years ^[1], an equity grant with no route to cash stops working as pay for people who joined early. The retention half rests on the word of a platform operator and a company that has just run a sale ^[14]. Sifted's account says structured programmes are built to reward long-standing staff and keep them engaged ^[13], but it includes no attrition figures from before or after a sale. If staff who sell leave faster than staff who could not, the retention case fails. Moneybox's tenure and percentage caps ^[6] suggest the company itself expected some sellers to leave unless it limited how much they could take out.