Private Company Tender Offers have grown significantly in the last few years. Take this short true or false quiz to test your knowledge.
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How Well Do You Know Tender Offers?
Tender offers don’t tend to aid recruiting and retention.
True or False?
Question 1 of 6
False!
Running a tender can encourage retention by giving employees a path to liquidity for their long-time shares. Regular company liquidity events also can show prospective talent that you’re committed to helping employees monetize their shares.
Next Question
True
a.
False
b.
Tender offers allow employees to turn their equity into cash.
Question 2 of 6
True!
A tender offer allows employees to receive cash in exchange for their stock and options. When a company conducts a tender offer through Shareworks, employees receive cash upon completion and can use it to fund major purchases, like a home or a car.
Tender offers are a rare occurrence at most private companies.
Question 3 of 6
In recent years, there has been an increase in regularly scheduled tender offers. Some companies even offer more than one tender offer per year to their employees. In fact, some private companies now offer regularly scheduled liquidity events as a strategy to recruit and reward employees.
It’s often necessary to update your 409A valuation after running a tender offer.
Question 4 of 6
An employee-wide or high-volume offer may affect your valuation, so you should consult with your legal team and auditors before and after issuing. For help updating your valuation, Shareworks Valuation Services can provide professional and audit-ready valuations from our dedicated valuations team.
Employee education isn’t an important part of tender offers.
Question 5 of 6
When employees understand the process and how they’ll receive funds, a tender offer often runs more seamlessly. Education is especially important if it’s the company’s first tender offer.
A shareholder communication plan is an essential part of the tender offer process.
Question 6 of 6
Sharing information on company performance and governance with eligible sellers can help sellers make an informed decision on whether or not to participate in the transaction. With Shareworks you can easily host your disclosure information in the same workflow where participants elect to sell.
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Disclaimer +
Shareworks by Morgan Stanley, Morgan Stanley Smith Barney LLC, and its affiliates and employees do not provide legal or tax advice. You should always consult with and rely on your own legal and/or tax advisors. Shareworks by Morgan Stanley services are provided by Morgan Stanley Smith Barney LLC, member SIPC, and its affiliates, all wholly owned subsidiaries of Morgan Stanley. CRC3552823-4/21
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